If a C-Perm loan is about to be modified to perm financing and the borrower requests additional funds, is this considered a renewal under 1026.20? Is a new application and LE required?

Depend on whether the existing obligation is extinguished and replaced by a new obligation.

Randy, I have same situation. Increase by $20,000 but note will be modified, not replaced.

It will be a modification with the additional loan amount and some additional fees. So, no LE required?

Official Interpretation

20(a) Refinancings

1. Definition. A refinancing is a new transaction requiring a complete new set of disclosures. Whether a refinancing has occurred is determined by reference to whether the original obligation has been satisfied or extinguished and replaced by a new obligation, based on the parties' contract and applicable law.

Ok, so dumb question - how do you disclose the additional costs associated with the modification - new CD??

Well, a transaction is either a refinance or it is not. If it is, then you start with an LE, do your ATR/QM stuff and all the other Regulation Z and RESPA requirements.

Typically, these transactions would not be a refinance but without actually knowing what you are doing and how you are doing it, it is hard to say definitively. That is why you have to always go to the regulation and read the definitions.

I don't believe what we are doing meets the definition of a refinance, so for a modification, do we need to provide a CD?

If it is deemed not a refinance, it is exempt from all of Regulation Z requirements, including TRID.

Your costs typically will be disclosed within the loan modification document.