Re: Modification / Extension

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I agree with the answer provided by JGo9. If you make a loan in 2011 you have no idea at the time that loan is made if it will be modified or extended in the years to come. If the borrower requests action in 2012 and as a result you decide to modify or extend the loan, you may, to the extend allowed by state law, impose a fee at that time. Generally a new disclosure is needed when you refinance a loan, not when the loan is extended or modified. If no disclosure is provided at the time of extention/modification then the fee is still not disclosed. As observed by JGo9, examiner’s often expect a disclosure for an extension/modification when a fee is charged or when more extensive changes are made.

In your state you can probably charge the fee, depending on which state statute you have chosen to lend under. Check the statute you have selected to assure the fee is legal and then you should have the borrower sign a statement agreeing to the fee. The statement could be part of the extension/modification agreement.