[rcooper]

Here is a similar question posted in a forum a few weeks back. https://mycomplianceresource.com/forums/topic/work-out-loan-atr/

§ 1026.43 does not apply to any change to an existing loan that is not treated as a refinancing under § 1026.20(a). However, the commentary doesn’t address what to do in your particular situation regarding an open-end in default modified to a closed end. IMO, this would be worth consulting your attorney before you implement a new procedure for these types of transactions. Either way – refinancing or modification – you would need to give new disclosures. See commentary 1026.40 -5 https://www.bankersonline.com/regs/12-1026/12-1026-040.html.

[ScottH]

If the loan is going from open end to closed end then it is a refinance under TIL even if it is done as a modification.

[Author]

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