Real Estate Lending & Skip-a-Payment Programs

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Question:

I have two questions specifically geared toward loan skip-a-payment programs. Can real estate secured loans be solicited for skip-a-payment programs? Is this skip-a-payment program considered an extension? (We follow a six extension rule.) Any help you can give on this subject would be greatly appreciated. It has caused quite a controversy between our audit and compliance area.

Answer:

There have been extensive discussions in Bankers Threads over the past years on skip-a-payment programs. I would suggest doing a search on Bankers Threads using the terms skip and payment going back four years. You'll find all kinds of information including some important risk issues to consider before offering these types of programs.

First published on BankersOnline.com 6/18/07