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?
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.