The looper is the most disappointing feature on my HD500. It's the first item in the signal chain meaning it will never behave the way a person will expect, it only records the dry signal from the guitar, making it impossible to record a rhythm or part with one patch/tone and then layer another tone over top of it... as soon as you switch anything in the chain it affects the recorded loop. Why anybody would want a looper to do this escapes me?
I love the HD500 but the looper is pretty much a wasted/nearly-useless feature in my opinion
If someone knows a way to put it last in the chain, that'd be super and I'd take back all the bad stuff I say about it.
To the OP: you could fade out by using your guitar's volume pot, remember the looper is recording the dry signal so the only way to affect it is by affecting the signal going into the POD.