Borrower requests rate reduction, bank reduces rate and monthly payment amount. From the date of military orders/active duty status to date of rate reduction request there were no payments made on the loan, thus only a credit for accrued interest was to be refunded to the borrower. I beileve the bank is suppose to get express written consent to reduce the loan principal, otherwise the Bank must credit back to loan or pay to customer in cash. Must borrower still be given the right to choose how excess funds (in this case it was only accrued interest) are returned to them as a result of the rate reduction or is crediting back to loan acceptable in this scenario? If you have any regulatory citations to provide, that would be helpful as well. Thanks!