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#2195319 - 10/12/18 03:22 PM Acquisition and HELOCs - change in terms
Snowgirl Offline
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We are purchasing 4 branches of a bank and along with that will be acquiring their loans. They offer HELOC products that we do not offer. Can we convert them into our HELOCs by disclosing the terms of ours and letting them know their existing terms will no longer be in affect or do we have to accept them they way they have them at their current bank?

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#2195327 - 10/12/18 05:01 PM Re: Acquisition and HELOCs - change in terms Snowgirl
rlcarey Online
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rlcarey
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Galveston, TX
You cannot change a HELOC unless it is a very minor change. What are the differences? Most likely you are going to have to service them as is.
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#2195342 - 10/12/18 06:40 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Snowgirl Offline
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Thanks rlcarey, that is what we thought but wanted to get another opinion.

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#2195364 - 10/12/18 08:45 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Rocky P Online
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Florida
Snowgirl - add to your pre-purchase checklist - "Are all loans compatible with our ability to service and/or retain, and if not, is there an outlet that we can sell them to?"
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#2195376 - 10/12/18 10:49 PM Re: Acquisition and HELOCs - change in terms Rocky P
Richard Insley Offline
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Richard Insley
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Toano, VA
Originally Posted By Rocky P
add to your pre-purchase checklist
Excellent advice! You rarely get much time for due diligence when you're acquiring another bank, but servicing compatibility is an essential part of it. If it will be more costly to service acquired assets, that should be factored into the acquisition price.
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#2200695 - 12/13/18 09:50 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Snowgirl Offline
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Joined: Sep 2003
Posts: 729
So what if our system can't do some of the funky stuff the other bank has in there note - like odd change in rates that we don't have the ability in our system to set up or calculating of payments - do we have to manually calculate and do these or can we do a change in terms if it is in the borrower's favor?

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#2200711 - 12/13/18 11:43 PM Re: Acquisition and HELOCs - change in terms Snowgirl
rlcarey Online
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rlcarey
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Galveston, TX
Time to sit down with legal counsel.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2200714 - 12/14/18 12:22 AM Re: Acquisition and HELOCs - change in terms Snowgirl
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Change in terms = cramdown
Refinancing = negotiation of mutually satisfactory changes
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