It’s not uncommon for us to see lenders using terms such as refinance, renewal, extension, modification, etc., interchangeably. Many are surprised to learn that most of these terms are not defined within the regulations. Regulation Z; however, does define a “refinance” as …an existing obligation... satisfied and replaced by a new obligation undertaken by the same consumer.... In other words, if you satisfy and replace an existing note with an entirely new note to the same consumer, you have a refinance regardless of what you might call it. If you don’t play by the refinance rules, you could end up in hot water with examiners.
Kevin explains more in the video.
Published
2024/09/16
