Skip to content

TIL Required If Lowering Rate & Charging Fee?

Answered by: 

Question: 
If you modify an existing consumer loan secured by their primary residence and charge a fee, do you have to disclose with a TIL? The only thing we are doing is lowering the rate and charging a fee.
Answer: 

We'll see if other Gurus have an opinion on this, but the rate reduction is not a refinancing and no new disclosures are required because of that. If the fee is a buy-down though, I view that as a direct consumer cost related to the finance charge and that makes this a cloudy issue at best. I would be conservative and treat this cost as a new loan/refi and make disclosures. Even with the eventual lower rate, you are imposing a new fee. I have not seen a case directly on this point, however.

First published on BankersOnline.com 7/15/13

First published on 07/15/2013

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