Would a forbearance agreement that extends the maturity date of a loan be reportable for CRA?

I leaning against it but I'm caught up on the extension of the due date.

This doesn't sound reportable to me. It sounds more like an extension and not a refinancing. See the CRA Qs&As for section .42(a). AR.

Is the forebearance actually a modification that is extending the term as well as modifying the terms to give time for things to get better and allow repayment? If yes, I would report it. It is simply called a forebearance agreement because the bank is not calling the loan but making some accommodations.

Thank you both.

Yes KB, the maturity date is extended.

AR, I've read through the Q&A's and they don't address this situation specifically. At least not that I can find.

I'd like not to report it, but the fact that the due date has been extended is bothering me.

Now that two of the people that I can count on their opinions have different views, I really don't know which way to go.

Was it matured? Was anything else modified? Modification agreements (and forebearance agreements are modifications just with additional legalese for problems) are reported for CRA when all they do is extend the maturity, just like a renewal (also CRA reportable).

I'll have to call in the file and have a look to see exactly what changed. I'll get back to you with the changes.

Thanks!!

In my previous post, I was hoping that the answer for .42(a)—5, which discusses refis vs renewals, would lead you to where you needed to go. AR.

What was the final outcome on this?

I have a forbearance agreement that extends the maturity (it was not paid off at maturity and was in default). The forbearance agreement also modifies the payment terms.

Is it reportable?

Thanks.

In my view, the agreement is not reportable. AR.

Why would it not be reportable if the agreement is otherwise a refinance or renewal? The bank could have done a new note or modification agreement to renew/refinance but chose a forbearance so as not to give up legal rights and protections. (That being said I would NOT report a forbearance that merely says essentially we will let you keep making payments and won't sue as long as you do but we are not giving up our rights to declare default should we see fit...or something similar. but a forbearance that is renewing or refinancing? That could be, depending upon the specific situation, the same as a modification that can be reportable for CRA as stated in the Q&A below.

42 (a)-5 says:

§ll.42(a)—5: Should institutions
collect and report data about small
business and small farm loans that are
refinanced or renewed?

A5. An institution should collect
information about small business and
small farm loans that it refinances or
renews as loan originations. (A
refinancing generally occurs when the
existing loan obligation or note is
satisfied and a new note is written,
while a renewal refers to an extension
of the term of a loan. However, for
purposes of small business and small
farm CRA data collection and reporting,
it is not necessary to distinguish
between the two.) When reporting small
business and small farm data, however,
an institution may only report one
origination (including a renewal or
refinancing treated as an origination)
per loan per year, unless an increase in
the loan amount is granted. However, a
demand loan that is merely reviewed
annually is not reported as a renewal
because the term of the loan has not
been extended.

I was going from my original post in which I said this didn't sound like a refinance to me, but an extension. However, as my second post said, I was hopeful that the cite that I, and now you, pointed to would allow some analysis of the specific situation and a conclusion by the original poster on whether it qualified. From what we were given here, though, it doesn't sound like a reportable event. AR.

Thanks for all your thoughts. Based on what I'm seeing in the file, I think it qualifies as a refinance.

Thanks. What I am questioning, and looking for thoughts on, is that the guidance says there is no need to distinguish between a refinance and a renewal/extension for CRA, unlike HMDA. Perhaps I am misreading, but it seems you are saying an extension of maturity date would not be reportable. However, annual extensions of maturity dates (true maturity dates and not a demand note that is merely reviewed annually) are reportable for CRA. So, I am wondering why in your view an extension would not be reportable. Looking for insight to why you feel that way.

After almost a year of this topic being tabled, are there any additional thoughts on this subject? In some respects I felt that a concensus had not been reached.

Also, we have instances where a borrower will sign a deficiency agreement/note when they reach a settlement with the bank.

Example
Borrower Owes $500,000 on original note
Collateral sold (short sale): $450,000
Borrower signs a deficiency note: $50,000 which typically is unsecured.

Is the $50,000 CRA Reportable - assuming that it is still a business purpose credit and it falls on 4. a on the Call Report?

I believe it should be reportable as a refinance of the remaining balance.

AnonRegulator never got back to this topic so my questions are open.

OK. I am going to bring this old post back to life.

I have an odd situation: SB 25-year term loan (about 20 years remaining on the term)- this year the payment structure was modified, and the maturity date was extended 6 months.

Part of me thinks this is CRA reportable because the maturity date was extended. However, this is not the normal renewal that I am used to (like a 12-month loc renewing annually). I feel like this type of extension does not representing new or continued credit to a SB and should not be reported for CRA. I'm leaning toward not reporting and documenting my reasons in case I am questioned.

Any thoughts? This old thread was helpful, but I am still in conflict as to which way to go.
Thanks!

Goodness! I have not logged into BOL in a few years and imagine my surprise to see this topic at the top!

NFletcher, I would report it. You've extended the maturity of the loan.

Hah! It's been so long since I've logged in that my post counter started all over at 1 !

Welcome (back) to BOL bOaty!

It actually looks like you have two separate log-in accounts. Not sure how that happens.

bOaty (10705)
User
Joined: 08/01/2006
Last On: 05/10/2021

bOaty (49208)
User
Joined: 12/28/2016
Last On: Yesterday at 05:06 PM

Thank you for the response bOaty! It is my first time reporting for a large bank, so I am really nerding out over all this!!
Thank goodness for the BOL threads (even the old ones )