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#1491428 - 01/07/11 04:19 PM Question - modifying loan after maturity
Skittles Online
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Skittles
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TN
Yes, I know that's a no-no; however if a lender does this he's violating Reg Z. If it's the borrower's primary residence is he also violating RESPA?
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Lending Compliance
#1491467 - 01/07/11 04:42 PM Re: Question - modifying loan after maturity Skittles
rlcarey Online
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rlcarey
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Galveston, TX
I would be asking your attorney regarding the validity of attempting to modify a note that has already matured. How can you modify a contact when it has already terminated. I would cross that bridge before analyzing your compliance issues.
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#1491511 - 01/07/11 05:05 PM Re: Question - modifying loan after maturity rlcarey
Skittles Online
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Skittles
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TN
In a perfect world that would work Randy; however here it won't. I'm going to cite this on my monthly compliance exception report and want to make sure I'm correct on the violations. Right now this is all I can do - and bring it to the Audit Committees attention during the meeting.
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#1491594 - 01/07/11 05:54 PM Re: Question - modifying loan after maturity Skittles
rlcarey Online
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rlcarey
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Galveston, TX
Not an attorney, but I would opine that the modification, since the original note had matured, replaced the original obligation and was a refinance so all TIL, RESPA, etc. disclosures would have been required.
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#1491602 - 01/07/11 06:04 PM Re: Question - modifying loan after maturity rlcarey
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
Ditto.
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#1491654 - 01/07/11 06:40 PM Re: Question - modifying loan after maturity Dan Persfull
Skittles Online
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Skittles
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TN
Thanks.
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#1491739 - 01/07/11 07:24 PM Re: Question - modifying loan after maturity rlcarey
Richard Insley Offline
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Richard Insley
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Toano, VA
Originally Posted By: rlcarey
all TIL, RESPA, etc. disclosures would have been required.

Why? Didn't the lien expire when the original loan matured? That would make the modification agreement an unsecured debt--exit RESPA. Since it probably exceeds $25,000--exit TIL.

The core problem was and continues to be whether the bank has lost its collateral.
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#1491751 - 01/07/11 07:31 PM Re: Question - modifying loan after maturity Richard Insley
rlcarey Online
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rlcarey
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Galveston, TX
Richard - Hence my original referral to the bank's attorney. smile
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#1491814 - 01/07/11 07:56 PM Re: Question - modifying loan after maturity rlcarey
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
Quote:
Didn't the lien expire when the original loan matured?


That would depend on state law. In IN if the note's maturity date is noted on the mortgage the lien is valid for 10 years after that date or until released by the FI.

Again as Randy said, seek legal counsel.
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