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#33586 - 09/19/02 08:25 PM HELOC increase
Anonymous
Unregistered

Customer applies to increase their HELOC...new disclosures needed? I would say yes, but many are disagreeing, so I may be off in left field.

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Lending Compliance
#33587 - 09/19/02 08:32 PM Re: HELOC increase
RGS Offline
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RGS
Joined: Jul 2002
Posts: 689
Home of the 8 time NCAA Champ ...
I'm not finding anything in 226.5b that would excuse disclosures for this transaction, so I would say that, yes, new disclosures are required.
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#33588 - 09/19/02 08:42 PM Re: HELOC increase
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,234
Galveston, TX
If all you are doing is increasing the credit line without any other change in terms, then all you really need to give them is the modification documents and a right of rescission (Model Form G-7) and make sure you don't raise the limit until after the rescission period expires.
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#33589 - 09/19/02 09:59 PM Re: HELOC increase
Anonymous
Unregistered

See I was looking at it more from the perspective of the last response - I couldn't find anything excusing us from disclosure. That coupled with the fact that they would need a new rescission for the increase.

But, I guess if we would not be changing any other terms, maybe we don't have to disclose again with the typical HELOC app. disclosures.

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#33590 - 09/20/02 02:30 PM Re: HELOC increase
Anonymous
Unregistered

Any other opinions out there?

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#33591 - 09/20/02 02:45 PM Re: HELOC increase
captain morgan Offline
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captain morgan
Joined: Jun 2002
Posts: 200
Land of "uffda"
We treat this as a modification to the loan. Add money, keep the terms the same, and provide ROR disclosures.

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#33592 - 09/20/02 02:52 PM Re: HELOC increase
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,234
Galveston, TX
Unless you are replacing the current HELOC with a new agreement, you can modify the current HELOC in any way as long as (1) the customer agrees in writing and (2) you are not inserting a term that you would be prohibited from having in the original contract, and not have it be considered an application for a new HELOC requiring early disclosures.
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