Docs Required to Lower Interest Rate on Loan

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Question:

Is documentation required to lower the interest rate on an existing consumer loan not secured by RE?

Answer:

You'll need some type of legal agreement (or at least the customer should want it). You could do a modification agreement instead of a whole new note, however. Refer to Regulation Z Section 1026.20(a) for the rules about modification vs. refinancings.

First published on BankersOnline.com 3/4/13