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#1136 - 03/29/01 08:08 PM HELOC Index
I Wear Many Hats Offline
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I Wear Many Hats
Joined: Mar 2001
Posts: 591
the beautiful state of ME
We are thinking about changing our HELOC index. In some of the material I have read it refers to a "qualifying index". Are there parameters somewhere that will guide me through what a qualifying index is? Thanks for your help.

Sue Norton

Opinions expressed are not necessarily those of my employer.

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General Discussion
#1137 - 03/30/01 03:09 PM Re: HELOC Index
De Vonne Offline
Member
Joined: Jan 2001
Posts: 84
Sue,

A couple of things. A qualifying index is an index that is reasonably available to the consumer. That is, can the consumer pick up, say, a Wall Street Journal and find the index you select. You don't want to use the price of bread at the local supermarket as your index as it is not reasonably available to everyone (smile). Next contract law comes into play. If it says something to the effect that you may change the index at some future date or if the current index becomes unavailable, you will select another qualifying index which has an historical movement substantially similar to the original index, then ok. However, if the contract does not allow for you to change the index (of course depending on the language), then you have a change in terms issue, which would require customer approval of the change. Lastly, the index cannot be under the creditors' control. It must be independent. Take a peek at Section 226.5(b).


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