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.
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.
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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