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#749038 - 06/07/07 07:30 PM Renew Consumer Loan by Modification
Wiqit Offline
Member
Joined: Dec 2004
Posts: 56
Can the bank renew a consumer loan secured by real estate that has matured with a balloon payment by completing a modification agreement or must we originate a new loan?

The modified terms will affect the payment and the interest rate and do not positively affect the consumer.

I appreciate any help! Thank you!

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Lending Compliance
#749235 - 06/07/07 10:26 PM Re: Renew Consumer Loan by Modification Wiqit
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
There might be a state law issue, but federal regulations don't care if the loan has matured or not. Whether it positively affects the customer or not, is of no concern.

Refer to ยง226.20(a) for help with Reg Z on this issue. RESPA and HMDA line up the same as well.
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David Dickinson
http://www.bankerscompliance.com

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#749261 - 06/07/07 11:09 PM Re: Renew Consumer Loan by Modification David Dickinson
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Hmmm... If the loan has matured - isn't that loan extinguished and would not this be considered a refinancing??? It might depend on State law as David alluded too.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#749674 - 06/08/07 04:23 PM Re: Renew Consumer Loan by Modification rlcarey
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
What . . . you've never heard of back dating an extension agreement to make it look like it happened before the loan actually matured?!?

Randy's the attorney. I just play one on TV. I think his first sentence is worth looking into.
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David Dickinson
http://www.bankerscompliance.com

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