Construction to Perm (one time close)

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    We have a consumer construction to perm (one time closing) that is getting ready to convert over to regular P & I payments from the construction phase. However they did not fully draw out the line of credit….are they still bound to the higher payment listed in the note based off of the full commitment amount? I always believed our system would re-amortize the loan at the time of the switch based on the outstanding principal balance but it’s not on this particular transaction….would re-amortizing this make our TIL incorrect since the payment doesn’t match what we disclosed. I’m just curious how other banks handle this….does your system re-amortize automatically, do they pay original payments, or do you do a modification to lower the payment amount based on the lower principal balance? Any help would be appreciated!

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