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#2120958 - 03/07/17 10:43 PM annual renewal of commercial loan
Burgess Offline
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Joined: Jan 2004
Posts: 1,621
we usually write our commercial loans for one year so then we renew them annually.
we keep the same loan number
I have always thought these trigger the refinance HMDA classification - how do others treat this?
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#2120983 - 03/08/17 01:40 PM Re: annual renewal of commercial loan Burgess
RR Joker Offline
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Joined: Nov 2002
Posts: 20,654
The Swamp
Unless other circumstances prevail, a typical annual refinance would be reported as a refinance.
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#2120998 - 03/08/17 02:18 PM Re: annual renewal of commercial loan Burgess
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
Our regulator has told us that for these "modification/renewals" if the borrower is signing a new note (long form note) then report it. If it's a simple change in terms form (shorter form) to extend maturity, then we do not report.

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#2121011 - 03/08/17 02:54 PM Re: annual renewal of commercial loan Burgess
RR Joker Offline
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RR Joker
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The Swamp
I agree with the way burke answered this. I never presume anyone using the term 'renew' doesn't actually mean 'refinance'. Keeping the same number is meaningless. Most of what I see done on the loans described above are actually handled by a new note, but burke summed up the other ways it 'could' be handled.
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#2121287 - 03/09/17 06:19 PM Re: annual renewal of commercial loan Burgess
David Dickinson Offline
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Central City, NE
Same or different loan # is not an issue. That's an internal record keeping system. The question is about contract law. Did you satisfy/replace/extinguish Loan A with Loan B. If so, it's a refinance. If not, it's not a refinance.

we usually write our commercial loans for one year so then we renew them annually.
So did you renew (not replace legally) or refinance (replace legally)? These are not synonyms.
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