Would the modification of the interest rate on an existing first lien principal residence mortgage loan require escrow for the higher-priced loan regulation?
We offer a variable rate loan product for a commercial operating line of credit. The variable rate language in the promissory note states that the rate can change on any day. We have a policy in place to allow the customer to extend the note prior to maturity, if more time is needed for repayment, usually thirty or sixty days. With the extension, we increase the interest rate one percent from the rate they were at at maturity. The extension form we use is provided to us by a major banking product suppier, and we simply fill in the blanks and have the customer sign the extension. Part of the form requires us to fill in an interest rate with a space to date when the rate begins and another space for the length of the interest period. We have always placed the new interest rate at one percentage higher in the interest rate field, and placed the date of signing as the start date with words we insert "until paid in full" in the space where length of term for the rate is. At the bottom of the form it states: "all other terms of the original obligation remain in effect". We now have a discussion going on as to whether the way we are filling out the extension converts the note from variable rate to fixed. We have always considered the extension as variable in the past, because of clause that states the original obligation remains in effect. Now, we are being questioned as to using the words until "paid in full" make the note fixed rate. Would you have any advise on this matter to set us straight?
When you have an ARM loan that is being escrowed, can you avoid sending two notices of payment increase/decrease, due to the interest rate and escrow requirement change? We would like to do our escrow analysis and rate adjustment notification at the same time to avoid customer confusion.
Do we redisclose the truth in lending if the locked interest rate is lower than the rate used for the initial disclosure at application? Do we redisclose the truth in lending when going from a "to be determined" property to an actual property?
On an existing residential real estate loan, is a new TIL disclosure required if the interest rate is lowered and a fee charged for doing so?
What is the lock in date on an APR for the new HPML? Is it the date the loan is approved or is the date of the final TIL disclosures (closing documents)?
Does our bank need to request early disclosures on existing loans that are renewing where the interest rate changes? I am rewriting an existing loan to request the reduction of the rate from 7.25 to 6.5. I'm charging a $250.00 fee origination fee as well. Should we send early disclosures to the customer?
Is there a blanket disclosure that can be given describing the product/index used, but that we can still use if we change the margin at any time and not have to redo our Early Disclosure?
We have existing loans which are being modified to change the payment amount after a large principal reduction and/or a lower interest rate has been negotiated by the customer after again, a large principal reduction. Do we need to re-file this with HMDA to reflect the changes even though the original documentation hasn't changed, i.e., account number, no new credit report, no changes in the Mortgage and/or recordings?
We have a loan pending for a customer who we found is in the army reserves and in IRAQ on assignment. We have not made the loan yet, but the question arose that we may have to offer him a lower rate. Can I charge him the normal loan rate or do we have to make it at the rate of 6%?