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TIL Required If Lowering Rate & Charging Fee?

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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.

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 7/15/13

First published on 07/15/2013

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