LIBOR CFPB FAQ HELOCs 13 – Are there Regulation D alternative mortgage transaction HELOC index requirements to be considered by applicable creditors in the LIBOR transition?

Compliance > Regulation Z - TILA > LIBOR Transition
Q:  Are there Regulation D alternative mortgage transaction HELOC index requirements to be considered by applicable creditors in the LIBOR transition?
 
A:   Yes.

For reference, an “Alternative Mortgage Transaction” is a loan, credit sale or account:
 
  • That is secured by an interest in a residential structure, with one–to–four units, whether or not that structure is attached to real property;
  • Made primarily for personal, family or household purposes; and
  • In which the interest rate or finance charge may be adjusted or renegotiated. 12 CFR § 1004.2.

For applicable alternative mortgage transaction HELOCs under Regulation D, increases to the interest rate or finance charge are subject to certain limitations. 12 CFR § 1004.4(a). Creditors of certain existing alternative mortgage transaction HELOCs transitioning away from LIBOR should review these requirements when selecting a replacement index.
 
 
 
This Q&A was created based on information from the Consumer Financial Protection Bureau’s website (which may be updated from time to time) that provides Answers to Frequently Asked Questions on the Transition Away from LIBOR.  This information may be found here:  https://files.consumerfinance.gov/f/documents/cfpb_libor-transition_faqs.pdf
 

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