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#2069177 - 03/15/16 03:00 PM 2nd loan balloon with abundance of caution
elebra Offline
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Joined: Apr 2009
Posts: 106
We have a construction loan that is being amortized out. The first loan will be made in accordance to our policy. The second loan will be made unsecured with a balloon and a mortgage in abundance of caution. The co-signer qualifies for the unsecured portion. Our policy states that unsecured loans won't exceed 36 months. Is a 3 year balloon ok for this type of loan or are we still bound by the 7 year balloon rules since we are taking a mortgage (in abundance of caution)?

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Lending Compliance
#2069181 - 03/15/16 03:04 PM Re: 2nd loan balloon with abundance of caution elebra
Skittles Online
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Skittles
Joined: Sep 2002
Posts: 13,964
TN
Remember - the only regulation that 'abundance of caution' gets you out of is the appraisal. All other regulations apply - flood - TRID, etc.
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#2069183 - 03/15/16 03:06 PM Re: 2nd loan balloon with abundance of caution elebra
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,025
Bloomington, IN
Your second loan is dwelling secured therefore it is subject to TRID, 1026.32, 1026.35, 1026.36, 1026.43, Flood, HMDA, etc. In other words the only thing abundance of caution gets you out of are the appraisal requirements in the Interagency Appraisal & Evaluations Guidelines.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2069205 - 03/15/16 03:29 PM Re: 2nd loan balloon with abundance of caution elebra
elebra Offline
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Joined: Apr 2009
Posts: 106
That's what I thought but I was having one of those moments. Thank you both!

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