Reg B

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  • #5487

    Is the bank required to give the client the “intent to proceed” with a heloc?



    I’m assuming you are talking about the “intent to proceed” that is typically given with the delivery of the GFE. This is in reference to the requirement that the bank can not collect money for fees (including third party fees) other than a fee for pulling a credit report; until the applicant(s) have indicated their intent to proceed.

    This does not apply to HELOCs.

    The intent to proceed is covered by 12 CFR 1024.7(a)(4) (Regulation X – RESPA).

    12 CFR 1024.7(h) covers that HELOCs do not have to comply with the portion of RESPA that talks about the intent to proceed.

    (h) Open-end lines of credit (home-equity plans) under Truth in Lending Act. In the case of a federally related mortgage loan involving an open-end line of credit (home-equity plan) covered under the Truth in Lending Act and Regulation Z, a lender or mortgage broker that provides the borrower with the disclosures required by 12 CFR 1026.40 of Regulation Z at the time the borrower applies for such loan shall be deemed to satisfy the requirements of this section.

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