Good Afternoon,

One of my loan officers has an existing consumer loan that is secured by a vehicle and the borrower's parent's CD. The parents want to cash in the CD to buy some land and want to swap the CD collateral for the purchased land. What is the best way to handle this request? Can he just swap the collateral or would we need to refinance and provide new disclosures?

Any guidance is much appreciated!

Swapping collateral is not a triggering event. If this is the parent's primary dwelling, it would trigger rescission of the new security interest only. Whether your current loan documents can be modified into a loan secured by real property is a question for your legal counsel.