Thread Starter: Anonymous
Title: Re: HELOC Floors
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I could really use some help. We have a floor on our HELOC plans but am trying to understand whether we are required to disclose it in the early plan disclosures. I've gone through several of the threads where it appears we do. But I thought I recalled reading something that said we would not. I've gone back through and reading Reg Z and the commentary and I'm not finding anything relating to floors only the maximum rate and the increase in rates. I found this through a search on BOL and am now really confused. Could someone please help me understand?
Floor and Ceiling Rate Disclosures
Answer by Lucy Griffin, BOL Guru
Guru Bios
Question: Does the floor and ceiling rate need to be on the actual note or a separate form of disclosure?
Answer: Truth in Lending requires that you disclose the rate cap, the ceiling rate for a dwelling-secured loan. You do not have to disclose the floor. The trick here is that TILA is a disclosure only. The rate cap must be part of the note or it doesn't exist. TILA requires you to have a rate cap for all ARMs and HELOCs so make sure those are in the note as well as the disclosure.
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