We have a sticky situation regarding some lots. Our customer's one year and a balloon loan has matured and he is ready to modify the loan....we are only extending the maturity for another year; however, the wife, is unavailable to sign the modification and we do not want to release her from the loan. If we prepare the modification only to modify the maturity and we only get his signature...would there be any problems concerning this. We are not going to release her.
Any advice is appreciated.

The modification is a legal agreement to modify the terms of the loan. It would be my opinion you would need all obligors of the loan to agree to the modificaiton.

I think that unless you re-write the note, all obligors will have to sign. A modification just changes the terms of the loan, and does not change the obligors.

Check with your attorneys. This doesn't have to be completed today. See if this will work: sending the customers a modification letter stating the terms of the next loan "term" by certified mail, stating that making the next payment on the loan (or passage of a stated amount of time without objection) will be considered as acceptance of those terms.

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If the modification only modifies the terms and not the obligors, what would it hurt to leave her off the modification?

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You have a "joint" contract, not a unilateral contract. IMO, the terms of the contract cannot be changed without all involved parties agreeing to the change.

Been there, done that, got burned. Get all obligors to sign!

We had a coborrower claim in court he only intended to help the borrower initially. He further claimed the extended maturity contributed to the collateral deterioration and increased the time for which the collateral was at risk. He won. The judge said we changed the original agreed upon contract and did not have the coborrower's agreement to do it therefore he was no longer liable.

Thanks for all comments....

Sorry about the "anonymous", thought I was already logged in....