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HOEPAs & Modifications

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  • #4087
    Ewhite
    Participant

    I have an article from 2010 on “Modifications vs Refinancing” written by a compliance consultant. It states that a modification of a HOEPA loan is considered a refinancing, but it does not say why. Do you agree with the statement? I remember at the time that I researched it & could not find where that was confirmed. Am I missing something?

    #4093
    rcooper
    Keymaster

    Maybe they’re talking about 1026.34(a)(3) which states:

    Refinancings within one-year period. Within one year of having extended credit subject to §1026.32, refinance any loan subject to §1026.32 to the same borrower into another loan subject to §1026.32, unless the refinancing is in the borrower’s interest. An assignee holding or servicing an extension of mortgage credit subject to §1026.32, shall not, for the remainder of the one-year period following the date of origination of the credit, refinance any loan subject to §1026.32 to the same borrower into another loan subject to §1026.32, unless the refinancing is in the borrower’s interest. A creditor (or assignee) is prohibited from engaging in acts or practices to evade this provision, including a pattern or practice of arranging for the refinancing of its own loans by affiliated or unaffiliated creditors, or modifying a loan agreement (whether or not the existing loan is satisfied and replaced by the new loan) and charging a fee.

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