HELOC Program Disclosures

Posted By: Princess of Power

HELOC Program Disclosures - 02/15/11 12:48 AM

Must the HELOC Program Disclosure contain verbiage regarding possible negative amortization if the program DOES NOT contain the ability for negative amortization.
Posted By: rlcarey

Re: HELOC Program Disclosures - 02/15/11 04:31 AM

No.

5b(d)(9) Negative Amortization

1. Disclosure required. In transactions where the minimum payment will not or may not be sufficient to cover the interest that accrues on the outstanding balance, the creditor must disclose that negative amortization will or may occur. This disclosure is required whether or not the unpaid interest is added to the outstanding balance upon which interest is computed. A disclosure is not required merely because a loan calls for non-amortizing or partially amortizing payments.
Posted By: Princess of Power

Re: HELOC Program Disclosures - 02/15/11 04:27 PM

Thank you Randy ~ that has been my understanding as well, now to "politely" let my young OCC contractor examiner know he is mistaken.