How you document an approved request to increase a HELOC is a question for your legal counsel. See model form G-7 for the proper right of rescission form that has to be given.
HELOC Increase-Rewrite As A New Loan?
If a customer has an existing Home Equity Line of Credit and then approaches to increase the HELOC by an additional amount of money, can a Change in Terms Credit Agreement and Disclosure be used for that or do we have to rewrite the loan as a new loan request? Obviously, if we are able to use the Change in Terms agreement, a Modification of Mortgage would need to be prepared and filed of record. What about Rescission on the new money? Do we have to give them an actual Notice of Right to Cancel form or can we just wait 3 business days from the date of the Change in Terms before we fund the new money?
First published on 12/23/2018