Loan Mod-wrong numbers in my favor

[jblewi2]

I recently got a wonderful loan modification that brought my interest rate down to 3% for 5 yrs, then to 4% for the 6th, 5% for the 7th, then 5.070% for the remainder up to 37 yr term. My original loan was Interest Only. The loan officer said that my loan modification was for Principle and Interest and it said it in the loan modification. I signed it and sent it back in. The bank called me a day later panicking that the computer put wrong numbers into my loan mod. It said it was P&I, but the numbers were for Interest only (thus a lower payment) but said P&I on the document. There is no place for the bank to sign on the loan mod, but the last section said that my signature would execute the document on that date. So, my question is, do I have a legal right to have them honor the executed loan mod? If i run down and file it at the court house against my loan/deed, doesn't that make it binding? Since federal regulations state that you can only do a loan mod if it goes to a P&I payment, they can only go to 3% and extend 10 yrs, should i just sign the new "corrected" form, or fight to have the other one honored?

[Moe Bedard]

The best thing that you can do is to sit down with a real estate attorney and have them go over the documents with you to let you know what the options are that they can recommend based on your state laws.

[LHarveyMadman]

If I understand it correctly, you were quoted specific interest rates on a specific loan balance. But when you were given the payment amount, it was for interest-only payments, not principal and interest payments. Is this right?

If you insist that you only have to pay the incorrectly-stated amount, then you will only be paying interest. Remember, you agreed to the interest rates as well. Even though your document says that the payment will go to principal and interest, when your lenders do the math with your agreed interest rates, no money will be going to your principal, regardless of what your documents say.

I suspect that what you have received is not the official document will be recorded with the county. All mortgage instruments that will be filed with the county courthouse require a notary's signature for both the borrower and lender. Without that final document with the necessary signatures, nothing is official. If you push too hard for the lender to honor their error, they could yank the modification offer. It's happened to others here who had their modifications initially approved and tried to get a little bit more. If the lender feels that you are acting in bad faith, they might change their mind. Tread carefully, and consider the good fortune you have already experienced thus far.

FYI, my lender also made a mistake on my initial modification documents. We agreed over the phone to 3.25% for 5 years and then 6.25% for the next 25. When my preliminary documents arrived, it said that my rate would be fixed at 3.25% for the life of the loan. I knew this was an error but signed the preliminary offer with the error nonetheless. When the official documents arrived (the ones that required a notary's signature), they had corrected their error. I didn't fight it, because I was grateful for the modification as originally discussed.

[jblewi2]

Very good point. Thank you. I have spoken to a real estate attorney for my state who said the same thing. I should be happy that I got them to modify it with little pain on my part. I will sign the corrected modification letter and count my blessings!

THANK YOU!

[LHarveyMadman]

You're welcome, and by the way, congratulations on your modification!

[jblewi2]

Thank you! I worked with CitiMortgage by the way, it was a hardship case, but they have been really helpful. I was 60 days late and sold some stock to catch up in good faith and they modified my loan. My payments went down $500 a month, which will be a big help and now I'll be paying P&I instead of barely making interest only.

I'm very happy for a website like this where people like me can go and get advice from other homeowners going through the same thing.