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TIL Required on 0% Rate 2nd Mortgage?

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Question: 
Is a TIL required on a 0% rate, no payment, due on sale $2,000.00 second mortgage given for closing cost assistance on the first mortgage closing?
Answer: 

12 CFR 1026.1(c)(1) specifies four criteria that together determine whether Reg Z applies. You probably meet items (i), (ii), and (iv) for this transaction. But item (iii) says the transaction must either be subject to a finance charge or be payable by a written agreement in more than four installments. You only have one payment, so the second part of (iii) is not met. The only question remains is is there a finance charge. There is no interest, so that's normally the biggest part of the finance charge. If you are not charging the borrower any other finance charge on this transaction, I would say that you have not met (iii) and therefore Regulation Z does not apply to that transaction. If Regulation Z does not apply, no TIL is required.

First published on BankersOnline.com 4/15/13

First published on 04/15/2013

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