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Modifications Construction Perm-Reduce Rate

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I have a question about modifications on our construction perm loans to reduce the rate to sell on the secondary market. We have our construction perms, that after completion and when the loan is closed out, that upon completion of the construction, a “float-down” of the interest rate may be allowed if it meets the guidelines to sell on the secondary market. Does this trigger anything for Reg B or Adverse Action?

If the rate reduction was requested and refused, I would say yes as this is a new term requested. If the bank reviewed it internally for consideration and there was no request made, I would say no, there isn't any adverse action.

First published on 04/14/2019

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