I have a large loan with a bank that will not renew it due to today's market. The loan is in a partnership with two companies. One is mine, of which I am the sole owner. I also have a second mortgage on my primary home that is held by my wife and myself. This originated with another bank that was purchased by the bank in question. Now both are with the same. Can the bank call my personal second mortgage if the corporation loan goes bad? The second loan is current.
You have two loans. One is coming due and it sounds like the balloon payment needs to be refinanced at a different bank. The current bank doesn't want to renew and is not under an obligation to do so.
They bought a loan which is a second mortgage on your home. If the second (home) loan and the first have a cross-collateralization clause, also known as a "dragnet" clause, the two could be related. What this clause does for the lender is to combine the collateral. If the first loan doesn't have enough collateral, they can rely on equity in the second.
There are many variables here. Do the contracts have a cross-collateralization clauses, are they enforceable as they originated with two separate lenders, are the obligations similar enough between the two to be associated since one is owed by your business and one is personal, and does your state law allow this on your home? An attorney knowledgeable about loan contracts is the person to whom you need to talk. Your lender may assume there is a cross-collateralization and if there is not one, you should inform him as soon as possible.
You also want to seek out a lender so you can attempt to refinance the ballooning loan. This will avoid any problem before it starts.
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You have two loans. One is coming due and it sounds like the balloon payment needs to be refinanced at a different bank. The current bank doesn't want to renew and is not under an obligation to do so.