Answer:
Converting open-end credit to closed-end credit must be treated as a refinance and all closed-end disclosures required by Subpart C of Reg. Z will apply. See the Commentary to 1026.40(5)(iii).
Modifying HELOCs Into Closed-End Products: Refi?
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Question:
We used to have a HELOC product but have discontinued all HELOCs. Our previous HELOCs are reaching maturity and we would like to modify them to closed-end products with either fixed or variable rates. Can we treat this as a modification or do we have to treat it as a refinance? If we have to treat it as a refinance it will be much more expensive for the borrower because we are in a state that requires an attorney closing for refi?
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