Balloon Loan and HPML

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Question:

Our bank has an existing balloon loan that will mature after April 1, 2010. If at maturity, the bank renews this loan to continue the orginal amortization schedule, will this loan be subject to HPML limits?

Answer:

If you renew the loan without replacing it (a refinance), then it is not subject to any new Reg Z disclosures or requirements. If you replace the loan with a new loan (a refinance), then it subject to all new disclosures and the HPML requirements, as applicable.

First published on BankersOnline.com 12/13/10