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Home Equity Term Loans

Question: 
On Home Equity Term Loans, are we required to Verify Employment as part of the Ability to Repay?
Answer: 

by Randy Carey: 1026.43(a) Scope. This section applies to any consumer credit transaction that is secured by a dwelling, as defined in § 1026.2(a)(19), including any real property attached to a dwelling, other than:

(1) A home equity line of credit subject to § 1026.40;

(2) A mortgage transaction secured by a consumer's interest in a timeshare plan, as defined in 11 U.S.C. 101(53(D));

Answer: 

by John Burnett:

A home equity term loan, also known as a home equity loan, is generally understood to be a closed-end extension of credit that would not be covered by the exemption for home equity lines of credit. It would be subject to the same Ability to Repay requirements as other loans covered by section 1026.43.

First published on 04/24/2016

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