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#1025906 - 08/22/08 01:00 PM Showing subordinate lien on GFE for a mtg mod
Many Hats Offline
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Orlando, FL
We are doing a mortgage modification (1st lien position) and there is an existing 2nd mortgage lien that will remain in place.

When the GFE is prepared, do we include on line J the subordinate financing? If so, it would make the total PITI look proper, but it also shows on line P as cash to the borrower, which doesn't make sense. Or, do we put the subordinate financing in parentheses to negate it?

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#1025940 - 08/22/08 01:36 PM Re: Showing subordinate lien on GFE for a mtg mod Many Hats
Dan Persfull Offline
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Bloomington, IN
The subordinate lien is not a settlement charge therefore you do not show it on your GFE and since you are not paying it off it also would not be shown on your HUD settlement statement.

If you are charging a subordination fee then that would be disclosed.
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#1025973 - 08/22/08 01:56 PM Re: Showing subordinate lien on GFE for a mtg mod Dan Persfull
Skittles Offline
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TN
Also, if you are doing a true modification and not a refinancing, neither a GFE or HUD is required.
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#1026002 - 08/22/08 02:19 PM Re: Showing subordinate lien on GFE for a mtg mod Skittles
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Orlando, FL
We are taking a loan from P&I payments to interest only for 3 yrs. So, we are doing a modification to simply extend the maturity date by 3 yrs, then a new note to change the payment terms.

So, technically, do we even need to do a GFE ot TIL?

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#1026056 - 08/22/08 02:50 PM Re: Showing subordinate lien on GFE for a mtg mod Many Hats
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
then a new note to change the payment terms.


If the new note satisfies and replaces the existing note you have a refinancing and new disclosures are required.

Why not change the payment terms with a modification agreement instead of a new note?
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#1026110 - 08/22/08 03:18 PM Re: Showing subordinate lien on GFE for a mtg mod Dan Persfull
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Orlando, FL
When I say a "new" note, it's really just a note change/modification...the number doesn't change and we aren't refinancing anything.

Our processor is busy trying to prepare a TIL, GFE, etc. - full disclosure - like a purchase, and I am just wondering if she's doing more than what's really required.

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#1026122 - 08/22/08 03:22 PM Re: Showing subordinate lien on GFE for a mtg mod Many Hats
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,416
Bloomington, IN
Quote:
the number doesn't change and we aren't refinancing anything.


The account number not changing has no bearing, that is simply an internal tracking/accounting number. If the new note (obligation) satifies and reaplaces the existing note (obligation) then it's a refinancing.

As long as the existing note remains your legal obligation then you have a modification.
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