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#2123886 - 03/27/17 10:01 PM Request to decrease loan availability
crcmnot Offline
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Joined: Sep 2016
Posts: 351
Multiple-advance term loan for interim construction purpose to a consumer. They were approved on their cost-to-build which included a basement. Loan has closed and first draw has been processed. Customer has now revised their cost-to-build eliminating the basement and loan officer would like to decrease their commitment & availability amount. Original loan amount included the approval of the plans w/basement. Can we prepare a modification agreement to decrease the loan amount (all other terms and conditions of the loan remain the same). I want to make sure that we wouldn't have to pay off this loan and re-disclose for the new lower amount and a modification (change in terms agreement) is acceptable in this scenario. My suggestion to the officer is to leave the loan as is with no modification agreement; if they don't advance, no harm/no foul. Thanks!

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#2123891 - 03/27/17 10:17 PM Re: Request to decrease loan availability crcmnot
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,164
Galveston, TX
Modification is possible without re-disclosure. The impact on your title insurance and other consideration would be a question for your attorney. Just not advancing the funds is probably the most painless road to take.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2123895 - 03/27/17 10:33 PM Re: Request to decrease loan availability crcmnot
Queen Tut Offline
Junior Member
Joined: Aug 2015
Posts: 41
What is impact to appraised value

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#2123896 - 03/27/17 10:42 PM Re: Request to decrease loan availability crcmnot
crcmnot Offline
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Joined: Sep 2016
Posts: 351
Thanks Randy....I like the 'not advancing' option much better!

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#2123897 - 03/27/17 10:43 PM Re: Request to decrease loan availability crcmnot
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,164
Galveston, TX
Queen Tut asks a very good question from a safety and soundness perspective.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2123941 - 03/28/17 03:13 PM Re: Request to decrease loan availability crcmnot
crcmnot Offline
Gold Star
Joined: Sep 2016
Posts: 351
Loan officer & Credit Admin are going to discuss this today. On the loan doc side, we won't do anything; from the credit side.....document, document, document!

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