[Michelle]

Follow up question – if we have a guidance line of credit for a builder that is constructing spec homes, and we will be taking a new SFR as collateral for each draw on the line, do we cover the requirement by providing the builder with the disclosure at the time of the guidance line of credit application or is a new disclosure required for each new collateral requests?

[Michelle]

Great, thanks Robin.

[Michelle]

Thank you. We have discussed with our LOS and they are saying this is the proper way to disclose this loan; however we wanted to get another opinion. We are in agreement that a 7/1 should be disclosed as a 7/1, but getting a different opinion from the LOS.

[Michelle]

Yes, the product description is in question. Yes, that is the loan product structure; however the LOS is disclosing as “1 year interest only, 6/1 ARM”.

[Author]

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