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Modification of consumer real estate loans

Home Forums What else is on your mind? Modification of consumer real estate loans

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  • #2328
    compdud
    Participant

    Is it ok to use modifications on consumer real estate loans? If so, other than flood, what else would be reviewed for compliance ?

    #2860
    JGo9
    Participant

    This seems to be a common question as of late. Good call on the flood part (make, extend, or renew).

    It really depends on what you are modifying. Are you just extending the maturity of the loan a month or two, or changing the payment date? Or are you doing more extensive changes?

    Are you charging a fee for the modification?

    #3183
    kmeade
    Participant

    Are you allowed to use a modification or change in term agreement on a consumer real estate loan that is tied to an index (ARM loan – five year treasury) to lower the rate in the middle of a rate change cycle? It would require lowering the rate, margin and floor. What is your opinion on using this document for this purpose and what restrictions would apply?

    #3174
    JGo9
    Participant

    Modifications really are not a compliance issue per say; it is more of a legal question and something I would encourage you to talk about with Bank counsel. Caution should be used when deciding on if a modification should be used or not.

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