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#1138399 - 03/02/09 06:33 PM Commercial Loan Fees, after the fact
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Not sure how I feel on this one, and looking for opinions, or prohibitions if anyone if familiar with any.

Commercial loans that we originate now have clauses in them stating that we will charge them a fee if they fail to turn in their annual financial statements (i.e. taxes, pfs, etc) upon our request.

Our older commercial loans do not have this wording in them, and hence those borrowers are not complying with your need to obtain their current financials.

On these older loans, may we still impose a fee for non-compliance even though it is not in the contract? If so, I cannot imagine that there is any required notice to be given, beyond courtesy reasons.

How about charging a fee for breaking certain more minorish covenents, instead of forcing them into foreclosure?
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#1138420 - 03/02/09 06:46 PM Re: Commercial Loan Fees, after the fact #Just Jay
HRH Okie Banker Offline
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Posts: 3,070
Oklahoma
JJ - I would strongly recommend that you run this by your legal counsel. They need to review the Promissory Note, Guaranty Agreement and Loan Agreement. That existing documentation, executed by your parties, may or may not allow you to charge said "default" fee. It might allow you to send written request to the customer and disclosing the default fee.

Read your documents and see if you can find any basis at all for pursuing this on existing documentation. I'd be interested to hear what response you get from legal cousel, if you go that route.
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#1138437 - 03/02/09 06:57 PM Re: Commercial Loan Fees, after the fact HRH Okie Banker
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
But that is what I am seeking opinion on... our older commercial loan documents do not explicity give us the basis to do so.

So then, what if anything, would prevent us from saying 'hey, we need this info, supply it or we will charge the loan $25 a week until you give us what we need in order to complete the reviews that are required of us by the FDIC".

Bigger question being, can we add and charg a fee down the road after origination?
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