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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.
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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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