Yes, we believe you can lower the interest rate and subsequent payments for a loan with a modification agreement rather than using new loan documents. We are not aware of any state laws that would prohibit you from using a modification agreement or require you to provide new disclosures if the original loan agreement is not being satisfied or released or otherwise triggers the need for new disclosures under Regulation Z (such as by adding a variable rate feature to a loan).
You also may wish to review our answers to two recent compliance questions regarding this issue.
For resources related to our guidance, please see: