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#835172 - 10/16/07 02:20 PM modification and paying off the note
trail hiker Offline
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Joined: Jul 2007
Posts: 436
If you are nto paying off the original note and replacing it with a new one then the loan is not reportable. Modifications are not reportable.
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I copied this from the HMDA threads "HMDA for Modification" post.
Apparently here we have a pracice of paying off the note and modifying the mortgage with a new maturity date to match the note. What's wrong with this picture? It does sound like it's wrong but is it just bad practice and why? Or is it a violation of something?
Why is this subject such a problem?

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#835299 - 10/16/07 04:31 PM Re: modification and paying off the note trail hiker
trail hiker Offline
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Joined: Jul 2007
Posts: 436
Ok. So I wouldn't make a good secret agent since I can't remain anonymous even when I try so I don't appear as ignorant on a subject as I really am. Pretense never works for me. Obviously we all know I have limited knowledge on this subject. I don't know where to go to get educated in a short amount of time. ANY help is appreciated. I cannot be the only one who is struggling to get a grasp of this issue. If I am, well, it's lonely and embarrassing.

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#835680 - 10/16/07 09:40 PM Re: modification and paying off the note trail hiker
David Dickinson Offline
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David Dickinson
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Posts: 18,762
Central City, NE
First, nothing to be secretive or embarrassed about. Good questions on a topic that many don't fully understand.

What you need to determine is are you "refinancing" (legally/contractually replacing the loan with a new loan) or are you renewing/modifying/extending the loan? If you are replacing loan A with loan B, you are refinancing it and it's reportable (assuming both are secured by a dwelling). Refer to ยง203.2(k)(2).

It sounds like you have a refinancing (you say you are paying off the note). But you also use the term "modifying".

This isn't a bad practice either way. You're also not violating anything either way.
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#835691 - 10/16/07 09:54 PM Re: modification and paying off the note David Dickinson
Anonymous
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Thank you, David. I actually wasn't referring to the HMDA reporting but the comment that not paying off and replacing a note is termed a modification - if you don't replace the note. Specifically, can you replace a note and still just modify the mortgage with a maturity date matching the new note - or does note replacement require a new mortgage?
We don't have a consistent procedure here and I need to address the way we handle the balloons when they mature. (I also have a question posted in the lending area on this topic. I certainly feel I am beating this horse to death but I am not quite master of the beast yet. Ayeyiyi - hopefully no one is sick of answering me yet.)

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#835722 - 10/16/07 10:25 PM Re: modification and paying off the note Anonymous
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
does note replacement require a new mortgage?

This is a state law issue.

Quote:
not paying off and replacing a note is termed a modification - if you don't replace the note.

Exactly. The mortgage has nothing to do with the definition of "refinance" for HMDA, Reg Z or RESPA.
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#835731 - 10/16/07 10:36 PM Re: modification and paying off the note David Dickinson
Anonymous
Unregistered

Thank you. Now I will research the state laws.

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#835914 - 10/17/07 01:55 PM Re: modification and paying off the note Anonymous
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Trail Hiker,

I you need to post something anonymously, you can only do so in this (Need to Remain Anonymous) forum. But first, you need to log out of Threads (click the Log Out link that is at the far right of the broad blue band at the top of the forum, next to where it says "Welcome Trail Hiker").

Then, before you can post in any of the other forums, you'll need to log back in.

John Burnett
BankersOnline.com
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#836155 - 10/17/07 04:10 PM Re: modification and paying off the note John Burnett
trail hiker Offline
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Joined: Jul 2007
Posts: 436
I know. Sigh. I forgot. But thank you for the reminder.

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#836398 - 10/17/07 06:23 PM Re: modification and paying off the note trail hiker
MagicCity Offline

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MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
LOL - Don't feel bad Trail..

There is no such thing as a stupid question..
And questions and learning are what we are all about here!

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