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#28488 - 08/20/02 05:09 PM Home Equity Line and "floor"
SouthoftheBorder Offline
Gold Star
Joined: Feb 2002
Posts: 335
The South
We're decreasing the current floor on our home equity line of credit products and I question whether new initial disclosures are required from a REG Z stand point....I say to change them because the lower floor looks better when comparing other HELOC plans to ours, but could not find anything that says it's a REG Z requirement......

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Lending Compliance
#28489 - 08/20/02 06:15 PM Re: Home Equity Line and "floor"
OnTheEdge Offline
Diamond Poster
Joined: Apr 2002
Posts: 1,677
SmallTown, USA
We have pretty much taken the opinion that a beneficial change to the customer does not require a subsequent notice. As a customer service/marketing function I think it would be wise to let your customer know about the change. Certainly disclosures for any new loans should reflect the lower floor.
The opinions expressed are mine and do not necessarily reflect those of my employer.

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#28490 - 08/20/02 07:48 PM Re: Home Equity Line and "floor"
A D Virr Offline
Gold Star
Joined: Oct 2000
Posts: 398
Derry, NH
Double check your HELOC disclosures for compliance with 226.5(b). By adding or changing a floor rate you could create a situation where the index plus your margin is below the initial rate based on the floor which requires additional disclosures.
Allan D. Virr, CRCM,CRP
Compliance Audit Solutions, LLC

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