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#956050 - 05/08/08 04:02 PM To Add Floor - Need Change in Terms?
Tarhe Online
Diamond Poster
Joined: Nov 2006
Posts: 1,239
California
To add an interest rate floor to our existing HELOC loans, would that require that each consumer borrower sign a Change in Terms Agreement to acknowledge and agree to the floor? I am thinking it does as it seems to be more than an "insignificant" change. Thank you!

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Lending Compliance
#956113 - 05/08/08 05:27 PM Re: To Add Floor - Need Change in Terms? Tarhe
Tarhe Online
Diamond Poster
Joined: Nov 2006
Posts: 1,239
California
To add to my e-mail: I found a previous posting (4/4/08) that said it would not be permissible to add a floor rate to existing home equity lines. We can only add a floor on new plans on a go-forward basis. To establish a floor, we would have to contract for it and it would need to be disclosed in our plan disclosures. Reg Z will permit a change that is agreed to in writing by the customer. So, if we did a Change in Terms and the customer would agree to that (sure), do we need to give new disclosures with a new historical table that takes the floor into consideration? Thanks!

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#956195 - 05/08/08 06:48 PM Re: To Add Floor - Need Change in Terms? Tarhe
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,941
Galveston, TX
No new early disclosures are required on a modification. Go luck on that project - I can already hear the laughter from your customers
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