Loan Modification Procedures
Answer by Dan Persfull, BOL Guru Guru Bios
Question: What is legally required when renewing notes or extending/modifying loans tied to a mortgage? We currently use a note renewal form that contains a new Fedbox with new interest rates that the customer signs. We also have a loan modification form that we use if a mortgage is involved if the loan is extended or modified. However, what if all parties liable on the original note or on the mortgage do not sign the new modification agreement? Rarely do all parties come in to renew and/or modify a note. Could you please give me some advice on what to do?
Answer: You'll find your answer in these FAQs under loan purpose.
[Editor's note: One significant concern is whether your renewal/modification documentation meets state law standards to protect your interest in the real property that is security for your loan(s). You should consult with bank counsel or an attorney versed in the laws of the state in which the real estate is located.]
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