Procedure for Terming Out a HELOC

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Question:

How is the best way to handle when a customer wants to term out a HELOC? Can it be accomplished by a modification or should it be considered as a new request? If new request would HMDA be applicable?

Answer:

Converting a HELOC to closed-end credit is considered a refinancing and would require all applicable Reg. Z Subpart C and RESPA disclosures. See Comment 1026.40-5 and in particular 40-5.iii.

It would be a refinancing for HMDA reporting purposes.

First published on BankersOnline.com 6/24/13