Difference between Renewal and Modification

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Question:

If a consumer's real estate three year balloon note has matured, can the note be modified with a modification agreeement, using the same original three year term and original rate, or does a renewal note with new disclosures have to be done? We are trying to determine the difference between a "renewal" and a "modification".

Answer:

If the loan has matured, how can you renew or modify terms that no longer exist? Contact your attorney for guidance and the legalities under any state laws that may be applicable.

First published on BankersOnline.com 7/26/10