Technical Tip: Extending Loan Maturities

CUBG’s expert staff provided this tip in response to a question we hear frequently from our clients.

Q:

Once a loan’s maturity date has passed, can a loan modification be done to extend the maturity?

A:

No. Once a loan has matured, you cannot make changes to the original contract, which has expired. This applies to all loan types, including lines of credit and term loans.

To extend the loan maturity and perfect the lender’s lien on a matured loan, you must refinance the loan with a new loan account number and a new set of full loan documents. Be aware that renewing a loan after maturity may cause issues with title insurance. CUBG recommends checking with your attorney and the title company for information on this. You should also check with the state to see if the mortgage or deed expires or matures – you may need to file an amended deed of trust or mortgage or modify these documents in some circumstances.

Loans can be modified before the maturity date with a change in terms agreement.

Please contact info@cubg.org for any additional questions or clarifications on this topic.

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