Modifiying Residential Real Estate Loan and TIL

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Question:

If we were to modify a residential real estate loan for the sole purpose of reducing the interest rate and we were to charge a fee for doing so, say $100, would this trigger a truth-in-lending disclosure?

Answer:

Regulation Z requires new disclosures ONLY in the event that you alter the original loan in a way that meets Reg. Z's definition of a "refinancing." Section 226.20(a) outlines what is and is not a refinancing. Based on your description, it appears that Regulation Z would not consider your actions to be a refinancing and would not require you to provide new disclosures.

First published on BankersOnline.com 3/7/11