We have a workout loan/TDR that we are wanting to lower the interest rate and amortize their payment out over 30 years to lower their payment to a more managable payment amount. Can we do a modification for this or would this qualify as a refinance since we are lengthening the term...I've found 2 different statements in the reg that are conflicting and it's confusing me...which isn't hard

Under 1026.20(a)(4)
A change in the payment schedule or a change in collateral requirements as a result of the consumer's default or delinquency, unless the rate is increased, or the new amount finaced exceeds the unpaid balance plus earned finance change and premiums for continuation of insurance of the types described in 1026.4(d)

Official Interpretations Paragraph 20(a)(2)
2. Corresponding change. A corresponding change in the payment schdule to implement a lower annual percentage rate would be a shortening of the maturity, or a reduction in the payment amount or the number of payments of an obligation. The exception in 1026.20(a)(2) does not apply if the maturity is lengthened, or if the payment amount or number of payments is increased beyond that remaining on the existing transaction.

Paragraph 20(a)(4)

1. Workout agreements. A workout agreement is not a refinancing unless the annual percentage rate is increased or additional credit is advanced beyond amounts already accrued plus insurance premiums.