Borrower:                                                                           Lender:  Citizens Trust Bank

                                                                                                                  Main Office

                                                                                                                  C/O LOAN ADMINISTRATION DEPARTMENT

                                                                                                                  P.O. Box 4485

                                                                                                                  Atlanta, GA 30302

 

IMPORTANT TERMS OF OUR HOME EQUITY APPLICATION EARLY DISCLOSURE

 

This disclosure contains important information about our Home Equity Line of Credit (the “Plan”).  You should read it carefully and keep a copy for your records.

AVAILABILITY OF TERMS.  All of the terms of the Plan described herein are subject to change.  If any of these terms change (other than the ANNUAL PERCENTAGE RATE) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees that you paid to us or anyone else in connection with your application.

SECURITY INTEREST. We will take a security interest in your home.  You could lose your home if you do not meet the obligations in your agreement with us.

POSSIBLE ACTIONS.  Under this Plan, we have the following rights:

                Termination and Acceleration.  We can terminate the Plan and require you to pay us the entire outstanding loan balance in one payment, and charge you certain fees, if any of the following happens:

(a)    You commit fraud or make a material misrepresentation at any time in connection with the Plan.  This can include, for example, a false statement about your income, assets, liabilities, or any other aspect of your financial condition.

(b)   You do not meet the repayment terms of the Plan.

(c)    Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral.  This can include, for example, failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, death of all persons liable on the account, transfer of title or sale of the dwelling, creation of a senior lien on the dwelling without our permission, foreclosure by the holder of another lien or the use of funds or the dwelling for prohibited purposes.

                Suspension or Reduction.  In addition to any other rights we may have, we can suspend additional extensions of credit or reduce your credit limit during any period in which any of the following are in effect:

(a)    The value of your dwelling declines significantly below the dwelling’s appraised value for purposes of the Plan.  This includes, for example, a decline such that the initial difference between the credit limit and the available equity is reduced by fifty percent and may include a smaller decline depending on the individual circumstances.

(b)   We reasonably believe that you will be unable to fulfill your payment obligations under the Plan due to a material change in your financial circumstances.

(c)    You are in default under any material obligation of the Plan.  We consider all of your obligations to be material.  Categories of material obligations include, but are not limited to, the events described above under Termination and Acceleration, obligations to pay fees and charges, obligations and limitations on the receipt of credit advances, obligations concerning maintenance or use of the dwelling or proceeds, obligations to pay and perform the terms of any other deed of trust, mortgage or lease of the dwelling, obligations to notify us and to provide documents or information to us (such as updated financial information), obligations to comply with applicable laws (such as zoning restrictions).  No default will occur until we mail or deliver a notice of default to you, so you can restore your right to credit advances.

(d)   We are precluded by government action from imposing the annual percentage rate provided for under the Plan.

(e)   The priority of our security interest is adversely affected by government action to the extent that the value of the security interest is less than 120 percent of the credit limit.

(f)     We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice.

(g)    The maximum annual percentage rate under the Plan is reached.

Change in Terms.  We may make changes to the terms of the Plan if you agree to the change in writing at the time, if the change will unequivocally benefit you throughout the remainder of the Plan, or if the change is insignificant (such as changes relating to our data processing systems).

Fees and Charges.  In order to open and maintain an account, you must pay certain fees and charges.

Lender Fees.  The following fees must be paid to us:

Description                                        Amount                               When Charged

Minimum Finance Charge:           0.50                                       Monthly

NSF Handling Fee:  32.00   At the time a payment is returned to us for non-sufficient funds

Stop Payment Fee:  32.00At the time you request a Stop Payment.

Overlimit Charge:  32.00  At the time your Credit Line balance exceeds your credit limit.

Photocopying Charges: 5.00 per page     At the time of your request.

Late Charge.  Your payment will be late if it is not received by us within 10 days after the “Payment Due Date” shown on your periodic statement.  If your payment is late we may charge you 5.000% of the unpaid amount of the payment.

Third Party Fees.   You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies.

These third party fees generally total between $0.00 and $800.00.  Upon request, we will provide you with an itemization of the fees you will have to pay to third parties.

PROPERTY INSURANCE.  You must carry insurance on the property that secures the Plan.

MINIMUM PAYMENT REQUIREMENTS.  You can obtain advances of credit during the following period:  60 months (the “Draw Period”).  After  the Draw Period ends, the repayment period will begin.  You will no longer be able to obtain credit advances.  The length of time the repayment period is as follows:  60 months.  Your Regular Payment will be based on a percentage of your outstanding balance as shown below or $25.00, whichever is greater (“First Payment Stream”).  Your payments will be due monthly.

Range of Balances           Number of Payments                    Regular Payment Calculation

All Balances                                        60                                           1.500% of your outstanding balance

Your “Minimum Payment” will be the Regular Payment, plus any amount past due and all other charges.

A change in the ANNUAL PERCENTAGE RATE can cause the balance to the repaid more quickly or more slowly.  When rates decrease, less interest is due, so more of the payment repays the principal balance.  When rates increase, more interest is due, so less of the payment repays the principal balance.  If this happens, we may adjust your payment as follows:  your balance at the beginning of the next payment stream may be increased.  Each time the ANNUAL PERCENTAGE RATE increases, we will check to see if your payment is sufficient to pay the interest due.  If it is not, your payment will be increased by an amount sufficient to cover all accrued FINANCE CHARGES.

After completion of the First Payment Stream, your Regular Payment will be based on your outstanding balance as shown below or $25.00, whichever is greater (“Second Payment Stream”).  Your payments will be due monthly.

Range of Balances           Number of Payments                    Regular Payment Calculation

All Balances                                        60                                           60 Payments

Your “Minimum Payment” will be the Regular Payment, plus any amount past due and all other charges.

A change in the ANNUAL PERCENTAGE RATE can cause the balance to be repaid more quickly or more slowly.  When rates decrease, less interest is due, so more of the payment repays the principal balance.  When rates increase, more interest is due, so less of the payment repays the principal balance.  If this happens we may adjust your payment as follows:  your payment may be increased by the amount necessary to repay the balance by the end of this payment stream.  Each time the ANNUAL PERCENTAGE RATE changes, we will review the effect the change has on your Credit Line Account to see if your payment is sufficient to pay the balance by the Maturity Date.  If it is not, your payment will be increase by an amount necessary to repay the balance by the Maturity Date.

In any event, if your Credit Line balance falls below $25.00, you agree to pay your balance in full.

MINIMUM PAYMENT EXAMPLE.  If you made only the minimum payment and took no other credit advances, it would take 10 years to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 9.250%.  During that period, you would make 60 monthly payments ranging from $97.41 to %150.00/  Then you would make 60 monthly payments of $134.64.

TRANSACTION REQUIREMENTS.  The following transaction limitations will apply to the use of your Credit Line:

Credit Line Home Equity Line Check Limitations.  The following transaction limitations will apply to your Credit Line and the writing of Home Equity Line Checks.

Telephone Request and Request by Mail Limitations.  The following transaction limitations will apply to your Credit Line and requesting an advance by telephone and requesting an advance by mail.

Other Transaction Requirements.  All written requests for line of credit advance must be received by bank personnel prior to 2:00 pm for the request to be processed on the same business day.

In Person Request Limitations.  The following transaction limitations will apply to your Credit Line and requesting an advance in person.

Other Transaction Requirements.  All written request for line of credit advances must be received by bank personnel prior to 2:00 pm for the request to be processed on the same business day.

Minimum Balance.  The consumer is required to maintain an insurance minimum that is equal to or greater than the amount of the sum of the first and second liens on the property.

TAX DEDUCTIBILITY.  You should consult a tax advisor regarding the deductibility of interest and charges for the Plan.

VARIABLE RATE FEATURE. The Plan has a variable rate feature.  The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate), the amount of the final payment, and the minimum payment amount can change as a result.  The ANNUAL PERCENTAGE RATE not include cost other than interest.

THE INDEX. The annual percentage rate is based on the value of an index (referred to in this disclosure as the “Index”).  The Index is the Wall Street Journal’s Prime Rate as published in the Business Section.  Information about the Index is available or published Wall Street Journal.  We will use the most recent Index value available to us as of the date of any annual percentage rate adjustment.  If the Index is no longer available, we will choose a new Index and margin.  The new Index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index becomes unavailable.

ANNUAL PERCENTAGE RATE. To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, then divide the value by the number of days in a year (daily).  To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily).  This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream.  To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the Index, then divide the value by the number of days in a year (daily).  To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily).  This result is the ANNUAL PERCENTAGE RATE for your Second Payment Stream.  A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE.  However, if the Index rate change since the previous adjustment is less than 0.015%, the ANNUAL PERCENTAGE RATE will not change.  The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by periodic annual percentage rate change limitations and the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin, discount and annual percentage rate.  After you open a credit line, rate information will be provided on periodic statements that we send you.

FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your ANNUAL PERCENTAGE RATE can change weekly.  Your ANNUAL PERCENTAGE RATE cannot increase or decrease more than 1.000 percentage point at each adjustment.  However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 21.000% per annum at any time during the term of the Plan.

MAXIMUM RATE AND PAYMENT EXAMPLE.

Draw period.   If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 21.000% would be $178.36.  This ANNUAL PERCENTAGE RATE could be reached at the time of the 12^th payment.

Repayment Period.  If you had an outstanding balance of $10,000.00 the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 21.000% would be $270.58.  This ANNUAL PERCENTAGE RATE could be reached at the time of the 1^st payment during the repayment period.

PREPAYMENT.  You may prepay all or any amount owing under the Plan at any time without penalty.

HISTORICAL EXAMPLE.  The example below shows how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the Index from 1994 to 2008.  The Index values are from the following reference period: June 28.  While only one payment per year is shown, payments may have varied during each year.  Different outstanding principal balances could result in different payment amounts.

The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year.  It does not necessarily indicate how the Index or your payments would change in the future.

                                                                                INDEX TABLE

1994                                       7.250                     1.000                     8.250     150.00

1995                                       9.000                     1.000                   10.000     136.04

1996                                       8.250                     1.000                     9.250     125.55

1997                                       8.500                     1.000                     9.500     114.99

1998                                       8.500                     1.000                     9.500     105.59

1999                                       7.750                     1.000                     8.750     133.41

2000                                       9.500                     1.000                   10.500     137.92

2001                                       6.750                     1.000                     7.750     132.49

2002                                       4.750                     1.000                     5.750     129.83

2003                                       4.000                     1.000                     5.000     129.31

2004                                       4.000                     1.000                     5.000

2005                                       6.000                     1.000                     7.000

2006                                       8.000                     1.000                     9.000

2007                                       8.250                     1.000                     9.250

2008                                       5.000                     1.000                     6.000

 

BORROWER ACKNOWLEDGEMENT

The Borrower, after having read the contents of the above disclosure, acknowledges receipt of this Disclosure Statement and further acknowledges that this Disclosure was completed in full prior to its receipt.  The Borrower also acknowledges receipt of the handbook entitled “What you  should know about Home Equity Lines of Credit.”