How are you handling deferred interest for loan payment deferrals? We are offering deferred or interest only payments for 90 days. I am reviewing documents for a loan that is a construction-perm loan. Loan modification was prepared by outside counsel states deferring interest only payments until maturity. Maturity is about 5 years away. Seems that we would want to collect the interest(income) sooner. Any thoughts on how you're handling things like this?

I would be chatting with your legal counsel. They are deferring all interest until maturity or are just planning to collect the 90 days of deferred interest at maturity? Can your servicing system handle that??

I actually work in legal (not an attorney) our 2 junior counsel I don't think had contemplated from an income perspective. They suggested credit or the CFO should weigh in. Of course with PPP everyone is hard to reach. I asked the same system question, and have included our Ops Manager in the email chain. It seems for the most part the system would default to collecting interest first. Just deferring the 90 days of interest to maturity. When payments resume we would follow the existing scheduled payments from there forward which would have 1 month of regular interest only after the 90 days and then switch over to principal and interest. I initially suggested considering 120 day deferral to take us to the principal and interest period.