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We have a loan that has a balloon payment that will mature on 6/6/20. It currently has both hazard and flood force placed insurance. The customer will not be paying the out the balloon payment nor is the customer providing sufficient flood or hazard insurance. What are our options in this situation? Maturity extension, renewal, etc.?
You can not make, increase, renew or extend a loan secured by a building or a mobile home located in a special flood hazard area within a participating community without sufficient flood insurance. That rule very much limits actions that are available to you. It will be much easier, for you and the borrower, if the borrower purchases adequate insurance. One option is to demand payment in full at the time the loan matures. You could release the collateral so the loan is not secured by a building.
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