What are the federal banking regulations and/or legal obligations requiring a bank to remove a guarantor from a loan upon legal notification in writing from all parties to do so?
There are no regulations of which we are aware, nor are there any laws that would require a lender to remove a guarantor for an obligation unless the guaranty is for some reason invalid. When a lender agrees to make a loan with a guarantor, it bases its lending decision at least partially on the financial strength and creditworthiness of that guarantor. If circumstances change and the lender is willing to release a guaranty, it may do so; however, it is unlikely that it can be compelled to make that decision.
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There are no regulations of which we are aware, nor are there any laws that would require a lender to remove a guarantor for an obligation unless the guaranty is for some reason invalid. When a lender agrees to make a loan with a guarantor, it bases its lending decision at least partially on the financial strength and creditworthiness of that guarantor. If circumstances change and the lender is willing to release a guaranty, it may do so; however, it is unlikely that it can be compelled to make that decision.
