Skip to content

Life of Loan Flood A Prepaid Finance Charge?

Answered by: 

Question: 
On an open end RE loan, i.e., HELOCs, is the life of loan flood a prepaid finance charge?
Answer: 

The Official Interpretations of Section 1026.4(c)(7) state that fees for services to be performed periodically during the loan term are not excluded from the Finance Charge, regardless of when the fees are collected. The concept of a "prepaid" Finance Charge is unique to closed-end credit and has no meaning in the context of open-end credit.

First published on 01/27/2014

Filed under: 
Filed under lending as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics