Non-Amortizing Feature/Balloon Payment

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    Would a single pay loan (one principal payment due at maturity) with monthly interest payments be considered a “balloon payment” under the new HMDA rules?



    Section 1003.4(a)(27) requires the LAR to indicate whether or not the loan has a balloon payment as defined in Regulation Z 1026.18(s)(5)(i). That section of Regulation Z defines a balloon as a payment that is more than two times a regular periodic payment. Since your regulation payment is interest only, the final payment apparently will be a balloon payment.

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