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Disclosures: Using A HELOC To Pay Off First Mortgage

Question: 
If a customer is paying off a first mortgage with a new home equity line of credit, do we need to disclose the first mortgage payoff in any disclosures?
Answer: 

Actually, the place you would usually disclose the payoff amount is on the HUD-1. The HELOC is exempt from the RESPA disclosures as long as you comply with Regulation Z disclosures. So the result is that you would not need to show the payoff amount. However, if you feel like giving the customer a HUD-1 anyway, nothing is stopping you.


-February 19
Flood - Dodging the BIG Wave , presented by Lucy Griffin and David Dickinson


First published on BankersOnline.com 2/2/03

First published on 02/02/2003

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