Answer:
I am assuming this is a loan subject to Reg Z (secured by real property or the primary residence and for a consumer purpose). 226.20 and its commentary, as well as your state law, will address modifications vs. refinances. If your current mortgage is filed for $250,000, you will have to modify or re-file your mortgage, and depending on your recording jurisdiction, you may or may not retain your lien position.
First published on BankersOnline.com 3/7/05