We have an interim construction loan that is ready for permanent financing. It was to be sold to the secondary market but now it does not qualify. The bank is willing to do in house financing. Can the bank do a renewal/modification of the note since it is now ready for amortization and if so, does that require all new TRID disclosures?
This question can be answered by the language of the construction note currently in place. If the language of the note allows for a modification to permanent financing by keeping the same note in place, then that is acceptable. Whether new disclosures are required depends on whether the transaction is considered a “refinancing” under § 1026.20(a): https://www.consumerfinance.gov/eregulations/1026-20/2016-14782_20160627#1026-20
Generally, if keeping the same note in place before its maturity, and not adding any new money or variable features, then no new TRID disclosures for the permanent phase would be required, as it is technically the same extension of credit. If this is not the case, then new TRID disclosures should be provided for the permanent phase.
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