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#2230800 - 02/12/20 03:47 PM Change In Terms - ATR?
Love those Regs Offline
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Southern State
Originally made a loan for major renovations to primary dwelling and set up as 12-month construction loan with intentions of them obtaining permanent financing elsewhere. Now, they are requesting we do permanent financing 61 month term with balloon payment. We are not doing a new note but rather a Change In Terms (CIT). Are "renewals" (change in terms note) covered by ATR? I have no doubt if we were starting with a new note this would have ATR but since we are using a CIT, I'm in doubt.
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#2230802 - 02/12/20 03:58 PM Re: Change In Terms - ATR? Love those Regs
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
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Central Illinois
I would consider it a new application and start over with new TRID disclosures.

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#2230833 - 02/12/20 05:35 PM Re: Change In Terms - ATR? Love those Regs
rlcarey Offline
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Galveston, TX
Unless what you are doing constitutes a refinance under 1026.20(a), the transaction would not be a refinance under Regulation Z and would not be covered.
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#2230851 - 02/12/20 06:25 PM Re: Change In Terms - ATR? rlcarey
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Randy, that is exactly what I was thinking. It does not meet the Reg. Z definition of a refinance. Thank you.
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#2231024 - 02/13/20 08:47 PM Re: Change In Terms - ATR? Love those Regs
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
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Central Illinois
My question would be why wouldn't I do all my construction loans this way? Why give out 2 sets of TRID disclosures if I can simply do a change in terms of my construction loan and set it up on an amortization schedule??

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#2231030 - 02/13/20 09:19 PM Re: Change In Terms - ATR? Love those Regs
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
A one off situation, I could argue. However I get a little uncomfortable with someone doing every 9 month construction loan and then modifying all of them into a 30 year mortgage. While like all things - it might be legal - and it also might be considered a UDAAP.
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#2231129 - 02/15/20 03:39 PM Re: Change In Terms - ATR? Love those Regs
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
Joined: Nov 2004
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Central Illinois
When you play with fire you usually get burned. I would take the extra week or so and do the new TRID loan and not give the appearance of circumventing the regulations.

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