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#1586319 - 08/02/11 03:28 PM Still a Bridge Loan ... Maybe
lrj Offline
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lrj
Joined: Dec 2010
Posts: 137
Texas
Still a Bridge Loan

I was reviewing this post and I have a similar loan but with a twist. Borrower has been unable to sell the property so LO wants to term out the loan for 7 years based on 25 year amo. The primary source of reduction is the sale of the property which will be used to paydown the loan. When the property is sold, borrower can refinance the balance or continue to repay until maturity. It seems like this is still a bridge loan. My preference would be to renew it for another 12 months and officer can still require payments, but it would be a cleaner bridge loan. Thoughts?
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#1586325 - 08/02/11 03:35 PM Re: Still a Bridge Loan ... Maybe lrj
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Can you convince me, or more importantly an examiner or judge, that a 7 year balloon loan with a 25 year amortization is a temporary bridge loan?

IMO it would not be a temporary bridge loan if it is termed out.
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#1586334 - 08/02/11 03:35 PM Re: Still a Bridge Loan ... Maybe Dan Persfull
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,277
I agree with Dan. You have to draw the line somewhere and 7 years is "a bridge too far".
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#1586335 - 08/02/11 03:40 PM Re: Still a Bridge Loan ... Maybe Dan Persfull
lrj Offline
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lrj
Joined: Dec 2010
Posts: 137
Texas
what about just renewing it for 12 months, but asking the borrower to make monthly payments?
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#1586346 - 08/02/11 03:50 PM Re: Still a Bridge Loan ... Maybe lrj
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
IMO that becomes a 12 month balloon note and would be a short term loan and not a temporary loan.
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#1586348 - 08/02/11 03:52 PM Re: Still a Bridge Loan ... Maybe Dan Persfull
lrj Offline
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lrj
Joined: Dec 2010
Posts: 137
Texas
thank you
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#1586358 - 08/02/11 03:58 PM Re: Still a Bridge Loan ... Maybe lrj
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Yes, amortization changes the nature of the bridge loan.
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HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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