Hi, we do a one-time close for construction to permanent financing. Upon conclusion of the construction phase, borrowers can request to convert their variable rate loan to a fixed rate. My question is if we are able to add on a fee post-closing for the borrower to convert to a fixed rate?

I believe since this is a fee we should have known about prior to loan closing, it should have been disclosed at that point. I do not believe we can add a new fee post-closing to allow the loan to convert to a fixed rate.

Thoughts, please? Thank you.

How are you going to charge a fee that you do not know will ever be assessed? Is this conversion option outlined in the legal agreement somewhere?

That is a good point about not knowing if the fee would be assessed - thank you.

The conversion option is outlined in the legal agreement. With respect to a fee, it simply states that "Borrower must pay any additional investor delivery fees".

However, the proposal isn't to add an investor fee but rather a bank fee. Do you think this is allowed post-closing?

What you negotiate with the customer is a matter of State law. You just have to make sure that you abide by whatever is in your legal agreements, which is a question for your attorney.