My supervisor will only agree to subordinate our second mortgage (interest only HELCO) for one of our customers that is trying to refi their first on the HARP program, if our customer is willing to refi the HELoc to a fully amortized 2nd mortgage. This will be at a slightly higher rate than they have now on the HELOC that is tied to the prime that can adjust. The new second would be a fixed rate and will raise their payment on the second and they would have some closing cost. Does this violate Fair lending?

No, but if this craters the borrower and they have to walk from both mortgages, ask your supervisor where that leaves the bank.......

I failed to state one of the most important parts. He is requiring they do a year payout when we offer 15 year second mortgage. That is really my question.

That's a 5 year payout. Sorry about the typo!

Fair lending only comes into play if they are not treating everyone in the same situation equally.

Not sure I fully understand the situation, but the 'new fair lending' is UDAAP (or UDAP). If you are forcing people into higher payments/rates uniformly you may not be creating fair lending issues, but you could be creating UDAAP issues.