Balloon Mortgage Priority Guarantee

[balloonman]

Has anyone every heard of this type of title policy?

I called Indymac servicing yesterday to beg for 6 months breathing space on my conforming 7/23 balloon loan. It is due to reset or be paid off March 2010. I wanted to ask for an extra 6 months so I could sell the property in summer 2010 when the real estate market may be a little better

When I called I assumed I had zero chance of a reset because A) I don't live in the property any more, it's a rental. Also B) there is a second mortgage on the property.

Imagine my surprize when they told me that due to the existence of a First American "Balloon Mortgage priority Guarantee", I will not need to reside in the home, and the second lien doesn't matter! They do not even need a subordination agreement.

Naturally I am delighted.Has anyone ever heard of this?

Many thanks

[balloonman]

It has been a couple of weeks since I posted, so I hope it is okay to bump this.

[LHarveyMadman]

Isn't First American your title insurance company?

I don't understand what their response means to you. Did they say you get the extra 6 months?

[balloonman]

sorry for any confusion. Provided First American Title Company are still offering this special title policy in November (when I am within 120 days of my loan coming due), I will be able to modify the loan to the 30 year rate of the day. Indymac are happy to do all this for me since First American are guaranteeing them first place on title, inspite of the loan getting modified.

What this means to me is that I won't be forced to sell the home this summer, which would have been the case under normal circumstances with a balloon loan that has turned into a rental with a second lien on it.


I'm just wondering if anyone had heard of such a title policy, only costs $300.

I should also add I am having no trouble making payments, I just was nolt expecting such good news from Indymac. I can only surmize that they are sick of having properties handed back to them. Even though I have a ton of equity that they could quickly foreclose on.

[Dan Bailey]

balloonman,
The way things are going these days, Im not surprised. It is a large hassle for the companies.