Thread Options
#2195319 - 10/12/18 03:22 PM Acquisition and HELOCs - change in terms
Snowgirl Offline
Platinum Poster
Joined: Sep 2003
Posts: 709
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?

Return to Top
Lending Compliance
#2195327 - 10/12/18 05:01 PM Re: Acquisition and HELOCs - change in terms Snowgirl
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,576
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.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2195342 - 10/12/18 06:40 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Snowgirl Offline
Platinum Poster
Joined: Sep 2003
Posts: 709
Thanks rlcarey, that is what we thought but wanted to get another opinion.

Return to Top
#2195364 - 10/12/18 08:45 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,259
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?"
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top
#2195376 - 10/12/18 10:49 PM Re: Acquisition and HELOCs - change in terms Rocky P
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,007
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.
_________________________
...gone fishing.

Return to Top
#2200695 - 12/13/18 09:50 PM Re: Acquisition and HELOCs - change in terms Snowgirl
Snowgirl Offline
Platinum Poster
Joined: Sep 2003
Posts: 709
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?

Return to Top
#2200711 - 12/13/18 11:43 PM Re: Acquisition and HELOCs - change in terms Snowgirl
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,576
Galveston, TX
Time to sit down with legal counsel.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2200714 - 12/14/18 12:22 AM Re: Acquisition and HELOCs - change in terms Snowgirl
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,007
Toano, VA
Change in terms = cramdown
Refinancing = negotiation of mutually satisfactory changes
_________________________
...gone fishing.

Return to Top

Moderator:  Andy_Z