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Atlantic Stewardship Bank

Prime Home Equity Disclosure

This disclosure contains important information about our HELOC w/no Discounts (the "Plan"). You should read it carefully and print 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 balance in one payment, and charge certain fees, if any of the following happen:

• 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.
• You do not meet the repayment terms of the Plan.
• 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:

• 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.
• 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.
• 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.
• We are precluded by government action from imposing the annual percentage rate provided for under the Plan.
• 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.
• We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice.
• 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 that 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.

Late Charge

Your payment will be late if it is not received by us within 15 days after the "Payment Due Date" shown on your periodic statement. If your payment is late we may charge you 5.00% of the unpaid amount of the payment or $5.00, whichever is less.

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 $20.00 and $1,000.00. We estimate the breakdown of these as follows:

Description	Amount	When Charged
Mortgage Recording Fee	$80.00	Upon each occurrence
Mortgage Cancellation Fee	$20.00	Upon each occurrence

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: Five (5) Years (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 the repayment period is as follows: Fifteen (15) Years. Your Regular Payment will be based on a percentage of your outstanding balance plus all accrued FINANCE CHARGES as shown below or $50.00, whichever is greater ("First Payment Stream"). Your payments will be due monthly.

Range of Balances	Number of Payments	Regular Payment Calculation
All Balances	60	0.556% of your outstanding balance plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.

After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your balance at the start of this payment period plus all accrued FINANCE CHARGES as shown below or $50.00, whichever is greater ("Second Payment Stream"). Your payments will be due monthly.

Range of Balances	Number of Payments	Regular Payment Calculation
All Balances	180	0.556% of your balance at the start of the repayment period plus all accrued FINANCE CHARGES

Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.

Minimum Payment Example

If you made only the minimum payment and took no other credit advances, it would take 19 years and 6 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 6.000%. During that period, you would make 60 monthly payments ranging from $75.93 to $106.56. Then you would make 174 monthly payments ranging from $35.00 to $76.46.

Transaction Requirements

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

Credit Line Special Check Limitations

The following transaction limitations will apply to your Credit Line and the writing of Special Checks.

Minimum Advance Amount

The minimum amount of any credit advance that can be made on your Credit Line is $500.00. This means any Special Check must be written for at least the minimum advance amount.

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), and the minimum payment amount can change as a result. The ANNUAL PERCENTAGE RATE does not include costs 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 Prime Rate as published in the Wall Street Journal. When a range of rates has been published, the higher of the rates will be used. Information about the Index is available or published at least weekly in the Wall Street Journal's Money Rates table. 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 take 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 take 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. The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin 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 monthly. There is no limit on the amount by which the annual percentage rate can change during any one year period. However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 16.000% per annum or, go below 5.000% 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 16.000% would be $191.49. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment.

Repayment Period

If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 16.000% would be $192.25. This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment during the repayment period.

Prepayment

A termination fee of $400.00 will be charged if loan is terminated within eighteen (18) months of loan date.

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: as of the last business day in January. 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 and that only the minimum payment was made. It does not necessarily indicate how the index or your payments would change in the future.

INDEX TABLE

Year (1)	Index %	Margin % (2)	Annual Percentage Rate	Monthly Payment
1994	6.000	0.000	6.000	$106.56
1995	8.500	0.000	8.500	$119.52
1996	8.500	0.000	8.500	$111.79
1997	8.250	0.000	8.250	$102.82
1998	8.500	0.000	8.500	$97.79
1999	7.750	0.000	7.750	$87.16
2000	8.500	0.000	8.500	$88.28
2001	9.000	0.000	9.000	$87.46
2002	4.750	0.000	5.000(8)	$64.23
2003	4.250	0.000	5.000(8)	$62.19
2004	4.000	0.000	5.000(8)	$60.15
2005	5.250	0.000	5.250	$59.03
2006	7.500	0.000	7.500	$64.22
2007	8.250	0.000	8.250	$63.30
2008	6.000	0.000	6.000	$54.44
(1) Year as of the last business day in January. (2) This is a margin we have used recently; your margin may be different. (8) This A.P.R. reflects a 5.000 percent floor.

Additional Provision

You must pay certain fees to third parties such as appraisers, credit reporting firms and government agencies. These third party fees generally total between $20.00 and $445.00. Upon request, we will provide you with an itemization of the fees you will have to pay to third parties. Title insurance will be required for loans of $250,000.00 or more.

All Third Party Fees, other than the $80.00 Recording Fee and a $20.00 Mortgage Cancellation Fee, if applicable, are waived.

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When Your Home Is On The Line: What You Should Know About Home Equity Lines Of Credit

More and more lenders are offering home equity lines of credit. By using the equity in your home, you may qualify for a sizable amount of credit, available for use when and how you please, at an interest rate that is relatively low. Furthermore, under the tax law -- depending on your specific situation -- you may be allowed to deduct the interest because the debt is secured by your home.

If you are in the market for credit, a home equity plan may be right for you. Or perhaps another form of credit would be better. Before making a decision, you should weigh carefully the costs of a home equity line against the benefits. Shop for the credit terms that best meet your borrowing needs without posing undue financial risk. And, remember, failure to repay the amounts you've borrowed, plus interest, could mean the loss of your home.

What is a home equity line of credit?

A home equity line is a form of revolving credit in which your home serves as collateral. Because the home is likely to be a consumer’s largest asset, many homeowners use their credit lines only for major items such as education, home improvements, or medical bills and not for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit -- your credit limit, the maximum amount you may borrow at any one time under the plan.

Many lenders set the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home's appraised value and subtracting the balance owed on the existing mortgage. For example,

Appraised value of home	$100,000
Percentage	x 75%
Percentage of appraised value	= $75,000
Less balance owed on mortgage	- $40,000
Potential credit line	$35,000

In determining your actual credit limit, the lender also will consider your ability to repay, by looking at your income, debts, and other financial obligations, as well as your credit history.

Many home equity plans set a fixed period during which you can borrow money, such as 10 years. At the end of this "draw period," you may be allowed to renew the credit line. If your plan does not allow renewals, you will not be able to borrow additional money once the period has ended. Some plans may call for payment in full of any outstanding balance at the end of the period. Others may allow repayment over a fixed period (the "repayment period"), for example 10 years.

Once approved for the home equity line of credit, you will most likely be able to borrow up to your credit limit whenever you want. Typically, you will use special checks to draw on your line. Under some plans, borrowers can use a credit card or other means to draw on the line.

There may be limitations on how you use the line. Some plans may require you to borrow a minimum amount each time you draw on the line (for example, $300) and to keep a minimum amount outstanding. Some lenders also may require that you take an initial advance when the line is set up.

What should you look for when shopping for a plan?

If you decide to apply for a home equity line of credit, look for the plan that best meets your particular needs. Read the credit agreement carefully, and examine the terms and conditions of various plans, including the annual percentage rate (APR) and the costs of establishing the plan. The APR for a home equity line is base on the interest rate alone and will not reflect the closing costs and other fees and charges, so you’ll need to compare these costs, as well as the APRs, among lenders.

Interest Rate Charges And Related Plan Features

Home equity lines of credit typically involve variable rather than fixed interest rates. The variable rate must be based on a publicly available index (such as the prime rate published in some major daily newspapers or a U.S. Treasury bill rate); the interest rate for borrowing under the home equity line changes, mirroring fluctuations in the value of the index. Most lenders cite the interest rate you will pay as the value of the index at a particular time plus a "margin," such as 2 percentage points. Because the cost of borrowing is tied directly to the value of the index, it is important to find out which index is used, how often the index changes, and how high it has risen in the past as well as the amount of the margin.

Lenders sometimes offer a temporarily discounted interest rate for home equity lines -- a rate that is unusually low and may last only for an introductory period, such as 6 months.

Variable rate plans secured by a dwelling must, by law have a ceiling (or cap) on how much your interest rate may increase over the life of the plan. Some variable-rate plans limit how much your payment may increase and how low your interest rate may fall if interest rates drop.

Some lenders allow you to convert a variable interest rate to a fixed rate during the life of the plan, or to convert all or a portion of your line to a fixed-term installment loan.

Plans generally permit the lender to freeze or reduce your credit line under certain circumstances. For example, some variable-rate plans may not allow you to draw additional funds during a period in which the interest rate reaches the cap.

Costs Of Establishing And Maintaining A Home Equity Line

Many of the costs of setting up a home equity line of credit are similar to those you pay when you buy a home. For example,

• A fee for a property appraisal to estimate the value of your home.
• An application fee, which may not be refunded if you are turned down for credit.
• Up-front charges, such as one or more points (one point equals 1 percent of the credit limit).
• Closing costs, including fees for attorneys, title search, and mortgage preparation and filing; property and title insurance; and taxes.

In addition, you may be subject to certain fees during the plan period, such as annual membership or maintenance fees and a transaction fee every time you draw on the credit line.

You could find yourself paying hundreds of dollars to establish the plan. If you were to draw only a small amount against your credit line, those initial charges would substantially increase the cost of the funds borrowed. On the other hand, because the lender’s risk is lower than for other forms of credit, as your home serves as collateral, annual percentage rates for home equity lines are generally lower than rates for other types of credit. The interest you save could offset the costs of establishing and maintaining the line. Moreover, some lenders waive some or all of the closing costs.

How will you repay your home equity plan?

Before entering into a plan, consider how you will pay back the money you borrow. Some plans set minimum payments that cover a portion of the principal ( the amount you borrow) plus accrued interest. But (unlike with the typical installment loan) the portion that goes toward principal may not be enough to repay the principal by the end of the term. Other plans may allow payment of interest alone during the life of the plan, which means that you pay nothing toward the principal. If you borrow $10,000, you will owe that amount when the plan ends.

Regardless of the minimum required payment, you may choose to pay more, and many lenders offer a choice of payment options. Many consumers choose to pay down the principal regularly as they do with other loans. For example, if you use your line to buy a boat, you may want to pay it off as you would a typical boat loan.

Whatever your payment arrangements during the life of the plan -- whether you pay some, a little, or none of the principal amount of the loan -- when the plan ends you may have to pay the entire balance owed, all at once. You must be prepared to make this "balloon payment" by refinancing it with the lender, by obtaining a loan from another lender, or by some other means. If you are unable to make the balloon payment, you could lose your home.

If your plan has a variable interest rate, your monthly payments may change. Assume, for example, that you borrow $10,000 under a plan that calls for interest-only payments. At a 10 percent interest rate, your monthly payments would be $83. If the rate rises over time to 15 percent, your monthly payments will increase to $125. Similarly, if you are making payments that cover interest plus some portion of the principal, your monthly payments may increase, unless your agreement calls for keeping payments the same throughout the plan period.

If you sell your home, you will probably be required to pay off your home equity line in full immediately. If you are likely to sell your home in the near future, consider whether it makes sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your home may be prohibited under the terms of your agreement.

Lines Of Credit Vs. Traditional Second Mortgage Loans

If you are thinking about a home equity line of credit, you might also want to consider a traditional second mortgage loan. A second mortgage loan provides you with a fixed amount of money repayable over a fixed period. In most cases the payment schedule calls for equal payments that will pay off the entire loan within the loan period. You might consider a second mortgage instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home.

In deciding which type of loan best suits your needs, consider the costs under the two alternatives. Look at both the APR and other charges. Do not, however, simply compare the APRs, because the APRs on the two types of loans are figured differently:

• The APR for a traditional second mortgage loan takes into account the interest rate charged plus points and other finance charges.
• The APR for a home equity line of credit is based on the periodic interest rate alone. It does not include points or other charges.

Disclosures From Lenders

The federal Truth in Lending Act requires lenders to disclose the important terms and costs of their home equity plans, including the APR, miscellaneous charges, the payment terms, and information about any variable-rate feature. And in general, neither the lender nor anyone else may charge a fee until after you have received this information. You usually get these disclosures when you receive an application form, and you will get additional disclosures before the plan is opened. If any term (other than a variable-rate feature) changes before the plan is opened, the lender must return all fees if you decide not to enter into the plan because of the change.

When you open a home equity line, the transaction puts your home at risk. If the home involved is your principal dwelling, the Truth in Lending Act gives you 3 days from the day the account was opened to cancel the credit line. This right allows you to change your mind for any reason. You simply inform the lender in writing within the 3-day period. The lender must then cancel the security interest in your home and return all fees -- including any application and appraisal fees -- paid in to open the account.

Glossary

Annual membership or maintenance fee

An annual charge for having the line of credit available. Charged regardless of whether or not the line is used.

Annual percentage rate (APR)

The cost of credit on a yearly basis expressed as a percentage.

Application fee

Fees that are paid upon application. May include charges for property appraisal and a credit report.

Balloon payment

A lump-sum payment that may be required when the plan ends.

Cap

A limit on how much the variable interest rate can increase during the life of the plan.

Closing costs

Fees paid at closing, including attorneys’ fees, fees for preparing and filing a mortgage, fees for title search, taxes, and insurance.

Credit limit

The maximum amount that may be borrowed under the home equity plan.

Equity

The difference between the fair market value (appraised value) of the home and the outstanding mortgage balance.

Index

Published rate that serves as a base rate for the interest rate charged on a home equity line and also as the base for rate changes used by the lender.

Interest rate

The periodic charge, expressed as a percentage, for use of credit.

Margin

The number of percentage points the lender adds to the index rate to determine the annual percentage rate.

Minimum payment

The minimum amount that you must pay (usually monthly) on your account. Under some plans, the minimum payment may cover interest only; under others, it may include both principal and interest.

Points

One point is equal to 1 percent of the amount of the credit line. Points must usually be paid at closing and are in addition to monthly interest.

Security interest

An interest that a lender takes in the borrowers property to ensure repayment of a debt.

Transaction fee

A fee charged each time you draw on your credit line.

Variable rate

An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Where to Go for Help

The following federal agencies are responsible for enforcing the federal Truth in Lending Act, the law that governs disclosure of terms for home equity lines of credit. Questions concerning compliance with the act by a particular financial institution should be directed to the institution's enforcement agency.

State Banks that are Members of the Federal Reserve System
Division of Consumer and Community Affairs
Mail Stop 801
Federal Reserve Board
Washington, D.C. 20551
(202) 452-3693
www.federalreserve.gov

National Banks
Office of the Comptroller of the Currency
Customer Assistance Unit
1301 McKinney St.
Suite 3710
Houston, TX 77010
(800) 613-6743
www.occ.treas.gov

Federal Credit Unions
National Credit Union Administration
Office of Public and Congressional Affairs
1775 Duke St.
Alexandria, VA 22314
(703) 518-6330
www.ncua.gov

Federally Insured Non-Member State-Chartered Banks and Savings Banks
Federal Deposit Insurance Corporation
Office of Compliance and Consumer Affairs
550 17th Street, NW
Room PA-1730, 7th Floor
Washington, D.C. 20429
(202) 942-3100 or
(800) 934-FDIC
www.fdic.gov

Federally Insured Savings and Loan Institutions and Federally Chartered Savings Banks
Office of Thrift Supervision
Consumer Programs
1700 G Street, NW, 6th Floor
Washington, D.C. 20552
(202) 906-6237 or
(800) 842-6929
www.ots.treas.gov

Mortgage Companies and Other Lenders
Federal Trade Commission
Consumer Response Center
601 Pennsylvania Avenue, NW
Washington, D.C. 20580
(202) 326-3758 or
(877) FTC-HELP
www.ftc.gov

Check List

Ask your lender to help fill out this check list.