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Article: Lenders may modify home equity loans
- Article from:
- Texas Banking
- Article date:
- November 1, 2003
- Author:
CopyrightCopyright Texas Banker Association Nov 2003. Provided by ProQuest LLC. (Hide copyright information)
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Question: We have customers would like to take advantage of the lower interest rates on their home equity loan. Can we modify a home equity loan?
Answer: A loan modification is a transaction where an existing note is modified, but the note is not cancelled. In a modification, a lender and a borrower may agree to extend the term of the loan, change the interest rate, change the monthly payments, etc. If the existing note is cancelled and a new note is signed to replace it, the transaction is generally considered a loan refinance.
The Texas Constitution does not specifically address modifications of home equity loans. Elsewhere, the constitution provides that a refinance secured by the ...