Loan Renewal & Mortgage Modification
Answer by Dan Persfull, BOL Guru Guru Bios
Question: We have a revolving line of credit that is being renewed to a term loan with a balloon payment and the loan amount is being decreased to what is outstanding now which is only about a $200 decrease in the loan amount. I have done a renewal note, but my question is the mortgage. I would need to do a mortgage modification to reflect the term note and new loan amount, correct? Also, am I charging the document stamps over again and intangibles if the mortgage is modified?
Answer: These are state specific questions. I will assume your renewal note satisfies and replaces the existing note, therefore qualifying it as a refinancing. More than likely you will need to modify your mortgage to remove the "open-end" clause and to reflect the terms of your new closed-end note. Charging the document stamps again is definitely a state related question.
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