Refi or Modify Matured Note

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    I’d like to ask everyone’s opinion regarding modifications of matured notes. We seem to have folks from both camps. Some say there is nothing to modify since the original note is past maturity while others think there is no issue modifying a matured note. My understanding is that if we have a new note signed it would be a refinance since the previous note is replaced which opens the transaction to new disclosures and HMDA reporting while modifications would not have these requirements. The transactions I’m referring to would not involve new money. Please share how your banks would handle extending a matured note.


    In my opinion, if a loan has matured there isn’t anything to modify. And, as you mentioned, if you replace the existing obligation with a new obligation that is considered a refinance.


    Under TRID, if a construction loan that has not yet matured needs to be modified due to construction not yet completed, can we do a change in terms, or would we need to disclose entirely, and treat as a refinance?


    I don’t recall anything in the TRID rules that says you can’t have a “change in terms/modification” of a loan. You’re still going to look to 1026.20(a) to determine if you have a refinance.

    Here is a post on determining “refinance” as purpose:

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