Received Indymac Hamp Final paperwork today!? Need help understanding balloon payment?

[amgbest]

This is the strangest thing but today I received my final Hamp loan documents (my loan is through Indymac/One West )and I haven't even paid my 3rd trial pmt yet (last one is due 2/1/11). I am actually in shock and don't believe it to be real...these are the terms:
1-5 years 2% pmt of $1,576 (w/escrow)
6th yr 3% $1,345.33 (w/out escrow which was $418.16 in 1-5 yr pmt)
7th yr 4% $1,543.06 (w/out escrow)
8-26 yrs 4.75% $1,696.81
The loan is for 308 mths/25 years

My original pmt was $2,600 so I am saving about a grand a payment now...yahoo!
The question I have is that I thought I only owed $368,000 on the loan and they have this statement saying "$13,892.77 of the new principal balance shall be deferred and will not pay interest or make mthly payments on this amount. The new principal blaance les the deferfed princ. bal shall be referred to as the "interest bearing principal balance" and this amount is $382,398.86". Then it also says below the payment/interest chart that on 10/1/2036 an estimated balloon payment of $211,386.45 is due for my loan to be paid in full...is this normal? So this means in 25 years I have to come up with the balance and pay it off?
Also, I don't understand why their final loan amount is more then what I thought was owed?
Is this really the paperwork for a final mod? Does this mean I'm in????

[amgbest]

Additional info: I paid $465,000 for my home in 2007 and now its only worth about $340,000.

[blondeinmn]

I have indymac as well. How was your experience with indymac? Why do you think they offered you a mod?

[Erik Sandstrom]

I have seen something VERY familiar, VERY familiar....

This looks to be a mistake on the modification paperwork. Not only will you be paying on a balance of $382,398.86, but you will also have a non-interest accruing balloon payment of $211,386.45????

There is NO way that your past due, arrearages on the account amount anywhere near that 211k. I would love to take a look at the modification paperwork to see if this is correct. It might be 211k forbeared and then you're paying on a much lower balance.

I would NOT sign those documents until you're sure what they mean.

Send them to me. My fax: 888-600-3151
email: erik@restreportmatters.com
PH: 760-858-2684

I'll tell you what you need to do.

[amgbest]

Honestly...I think they offered me the mod because I complained to the Office of Thrift Supervision (1-800-842-6929) who handle complaints / Consumer affairs for One West/Indymac. As soon as I got them involved they started working with me. Once they know someone is watching they seem to want to help you. On my 1st hamp application they denied it because they miscalculated the numbers then they told me I had to totally reapply which I complained to this agency about as I felt I would lose my home by the time they got around to looking at my 2nd application as the first one took them 3 months to deny. My advice is to catch them in a lie or mistake, document everything, and involve these agencies along writing a letter to your congressman. I wrote the complaint on 9/20 then was approved on 11/17.

[Maurice Bedard]

The $211k is what you will owe after 25 yrs. Since your payment is so low, you are paying almost nothing toward principal. And the $211k will include the $14k non interest bearing portion. I have know way of knowing if these figures are correct, but if you owed 368k to start with, and they defer $14k, you would be making payments on $354k. This comes out to a $1072 payment @2% amortized over 40 yrs. $1072 + $418= $1590, which is pretty close to your actual payment. I did the math, and it appears right, but instead of extending the loan out to the full forty years, you are making payments based on forty years, but after 308 months, you will need to pay off the balance. You will probably be able to refi by then.

I don't think Erik caught all the details correctly. This is a little confusing if you don't get the entire picture. He should have been tipped off by the forbearance amount of $14k because they don't forbear under HAMP unless the term is extended to 40 yrs first.


So AMGBEST- this is a good and correct mod. If you pay extra, it will mean the payoff date comes faster, so pay other debts first before paying extra on this loan. Extra payments don't go toward the ballon payment, and as soon as you pay off the first, the balloon will become due, unless you make a huge prepayment.

[amgbest]

Yes ******, I talked to my Indymac rep today and it is correct. In order to get my pmt down they needed to take off part of the loan as at that low of an interest rate I will still owe the $211,000 in the 30 years. My real principle balance is $396,291 which is based on the penalty fees of not making my payment for 10 months which they do not waive....all these fees are applied and that is why there is a large difference in the principle balance owed vs what my monthly statements says I owe.

The gist of it is...hamp is a program to keep you in your home....to make your payment "affordable now" during these hard times in hopes that the economy will change and your home will be worth more in the future. I am very happy that I get to stay in my home...very thankful. I guess what I heard about the program (that they reduce the amount owed on your home to the value it is currently at) compared to the reality of what it really is was quite distorted but the end result is there and bottom line I do get to stay it my home and that is all that really matters. This website is invaluable in helping achieve these mods and I hope people read this so they know what the "Real Deal" is.

[Erik Sandstrom]

After carefully reviewing the modification paperwork, this is what I have found. And just as an FYI - Indymac makes mistakes on the modification paperwork often. And they're doing it intentionally hoping the borrower doesnt catch it. Very sneaky of them!!!!! I would report this to HAMP Admin and Compliance. I'll keep this as a record and try to find my other client who this exact scenario happened to. When they called back Indymac stated that it was a mistake on their end and they will re-send the correct paperwork.

Here’s what I’ve found with the modification agreement you’ve received from Indymac.
HAMP Waterfall Method

1st – Determine the loan balance (add past due arrearages and delinquent interest to loan)
2nd – Reduce the Interest rate in increments of .125 to a floor of 2%
3rd – Extend the terms to no more than 40 years
4th – FORBEAR an amount of the principal, no greater than 100% LTV to the end of the term as a non-interest accruing balloon payment.

Indymac has based your new modified payment on a 40 year loan, which is what they should have done – however you reach the maturity date on your paperwork on 2036, when it should be 2051.
In one part of the document you see that only $13,892.77 shall be the deferred principal to the end of the term. This is technically what I believe the balloon payment should be.

They have only amortized your loan for 26 years but the payment you’re paying for the modification is based on a 40 year loan. That doesn’t make any sense at all.

Request to see the transaction history of the loan from one of the representatives so you can see how much is going to principal throughout the term of your modification.

This is NOT a HAMP modification but they have disclosed it as one. They need to follow HAMP guidelines if that’s what they are giving you.
40yr loan @ 2% = $1,158.00 (DEAD ON THE MONEY) without taxes and insurance

You might need to speak with someone with more experience than their normal representatives, if you have the negotiators contact information I would get them involved. It could be something as simple as a typo.

Good luck, let me know how it goes.

[Maurice Bedard]

Sometimes servicers are not allowed to extend the term by the investor, so they make a balloon due at the end of the original term. There have been many postings from people on this site with very similar mods. You payment would be the same even if it was extended to the full forty years, but the balloon is just due sooner. I don't know what limits the servicer has with the investor. I for one would not want to risk losing a mod over this. You should be able to refi if you are still there in 26 yrs, and your payments will be even lower. You can probably get a 15 yr loan, and pay it off in a total of 41 yrs, instead of 40 yrs with a 14k balloon. I wouldn't worry about what may happen in 26 yrs, just be happy tyou can afford to stay at least that long with this mod.


This could easily be a HAMP mod if it was necessary to do the loan this way to meet investor guidelines. If it says part 2 of a 2 part process, and mentions incentive payments it is HAMP; and if not, it may be as close as was possible.

[amgbest]

Thank you ****** and Eric for your replys. I did end up calling Indymac again yesterday for clerification. Yes, my investor (Deutsche Bank) stayed with the same terms on my loan and would not increase it to a 40 year loan which is why there is a balloon pmt. Each investor has different guidelines. They left the terms/maturity date the same as I have 26 years left to pay on my original mtg. My principle on this loan wil be $396,291.63. Based on the monthyl pmt/interest/and principle I will have paid approx. $185,000 to the principle and the rest to interest on this loan by 2036 (the Indymac rep calculated it). If you take this amount ($185,000) from the total owed which is $396,291, $211,000 is still owed after 26 years. She also told me that If you I don't sign this mod I will not be eligible for any mods for life of the loan which was interesting to hear. And yes ******, it does say Step Two of Two-Step Documentation Process and incentive payments on my paperwork. "Borrower incentive is $83.33 accrued monthly which will be applied to my principal balance after each of the 1st through 5th anniversaries of the month in which the Trial Period Plan is executed as long as you the loan does not become 90 days delinquent. It also states this about the Balloon Payment: To further reduce your monthly mtg pmt we have amortized your loan over 480 mths. By extending the amort. we are able to offer you lower payments. Because the loan is amort. over a term that is longer then your repayment period you willl have a balloon payment due when the loan is paid off. Please refer to the enclosed mod. agreement for add. details re: the balloon pmt".

Another thing I noticed on the paperwork is this statement: "If you fulfull the terms of the trial period including, but not limited to , making any remaining trial period payments, we wil waive all the late charges that have been accrued and remain unpaid at the end of the trial period". This was interesting to me as one the rep. I spoke to this week told me that was why my principal balance on my mthly stmt ($367,960) was lower then they say it is as of 3/1/11 which was $396,291.63 because of penalty fees accrued on the months I didn't pay my mtg. but the rep I spoke with yesterday said it was higher because I was just paying interest on the loan before. Not sure if I understand this one....but it does seem legit and correct. I'm also not sure I understand the $13,892.77 of the new principal balance that will be deferred and I will not pay interest or make mthly pmts on this amount....so is this another chunk that I will owe at the end of the loan on top of the balloon pmt? Thanks alot for reviewing this for me you guys!

[Maurice Bedard]

Your balance is higher because of any missed payments which are added to the loan amount, plus if yoour original payment is $2600, and your trial is $1900, all of the difference is also added to the loan. I am almost 100% certain that the total amount owed after 25yrs of $211k will include the $14k deferred amount, but I am not going to do that math. And even if it is not included in the $211k, it is a pretty small amount when compared to the $211k. It is less than 7% of the total, and the math is pretty easy, but just takes a little while because you have several interest rate cheanges to consider. But the fact that the docs say you have a balloon of $211k makes it look like it includes the deferred amount. I think the rep probably calculated the principal paid by subtracting the balloon payment from the original balance, and not by running the actual interest rates for the first 5 yrs, and then 1 yr at a time, and then for 20 more yrs.

Waiving the fees is required by HAMP, so that is standard. I think the rep was trying to make you feel like they gave you some special discount, but it is realy standard. Either that, or the rep was just ignorant about HAMP.

[shoogles]

Hi amgbest,
This is my first post on this site. My mortgage sounds almost identical to yours and I am with IndyMac too. I am in the process of filling out the application for HAMP and was wondering if you had any advice? My loan balance is about $390,000, and I am behind 8 months due to losing my job. I now have a job and qualify for HAMP based on the guidelines, but I am terrified that they are going to turn me down. Were you behind on your mortgage when you applied for HAMP? Thanks in advance for any help/advice that you can give.

[Cat Damiano]

Hi shoogles,


Welcome to the forum and thank you for joining..............

As an added measure to double check your qualifications you can try both the following calculator:

NPV Calculator Making Home Affordable


and also put the required information in the following thread:

Find out Now If you even QUALIFY for a Loan Workout Solution. Post Your Situation

[amgbest]

Hi amgbest,
This is my first post on this site. My mortgage sounds almost identical to yours and I am with IndyMac too. I am in the process of filling out the application for HAMP and was wondering if you had any advice? My loan balance is about $390,000, and I am behind 8 months due to losing my job. I now have a job and qualify for HAMP based on the guidelines, but I am terrified that they are going to turn me down. Were you behind on your mortgage when you applied for HAMP? Thanks in advance for any help/advice that you can give.

Hi Shoogles,
I was about 9 months late on my pmt. My advice to you is to document every call you make and get the rep.s id#'s and any mistake they make report them to the bureau I listed earlier in this thread as that is when things started working for me. My situation was that I turned in my profit & loss statement to prove my income as I am self employed and they entered my income incorrectly...3 months later they denied me for Hamp. After I caught their error of my income (I got this by talking to their rep. on the phone) they told me I had to fill out a whole new application instead of them just correcting their error. By that time my house would have been foreclosed on since it was taking them 3 mths to process these applications. I reported them and a month later a guy from their specialized dept. called me and put it through very fast as he had received the complaint from the bureau. They obviously do not like getting complaints and it seems that that is the only way they take you seriously.

[shoogles]

Thank you for your help!! I have already taken every person's name down and documented everything. It's been a nightmare! When I initially lost my job I called them and they told me that I could apply for a Fannie Mae unemployment program but I had to send them all of this documentation to prove occupancy. I sent them everything and waited and waited and waited...every time I called to check the status they told me it was still pending. Finally one day (at least 2 months had gone by from when I sent the documentation) when I called the rep told me that it was denied because the home was not owner occupied. I was like, "What?!?!? I live in my house!" They told me that they sent out a representative who talked to someone at the house who told them that he was my tenant and that he paid me rent. I told the rep, "Well, ya, I live in a duplex. I live in one side and rent out the other. Why didn't the rep knock on my door?" To which the rep had no answer. They said they would have to reschedule someone to come out again. As soon as I got off the phone, I called my tenant and asked him if someone came to his door asking if I was his landlord and why didn't he tell them I lived downstairs. My tenant then told me that he never spoke to anyone about being my tenant!!! Long story short, they never sent anyone out for a "2nd time" (I don't think anyone came out to begin with), and now I have a job so I can qualify for the HAMP. I have submitted the application and all of the documentation, so I am waiting to hear back from them. How long did it take them to get back to you?

[amgbest]

Thank you for your help!! I have already taken every person's name down and documented everything. It's been a nightmare! When I initially lost my job I called them and they told me that I could apply for a Fannie Mae unemployment program but I had to send them all of this documentation to prove occupancy. I sent them everything and waited and waited and waited...every time I called to check the status they told me it was still pending. Finally one day (at least 2 months had gone by from when I sent the documentation) when I called the rep told me that it was denied because the home was not owner occupied. I was like, "What?!?!? I live in my house!" They told me that they sent out a representative who talked to someone at the house who told them that he was my tenant and that he paid me rent. I told the rep, "Well, ya, I live in a duplex. I live in one side and rent out the other. Why didn't the rep knock on my door?" To which the rep had no answer. They said they would have to reschedule someone to come out again. As soon as I got off the phone, I called my tenant and asked him if someone came to his door asking if I was his landlord and why didn't he tell them I lived downstairs. My tenant then told me that he never spoke to anyone about being my tenant!!! Long story short, they never sent anyone out for a "2nd time" (I don't think anyone came out to begin with), and now I have a job so I can qualify for the HAMP. I have submitted the application and all of the documentation, so I am waiting to hear back from them. How long did it take them to get back to you?

After I wrote a letter to the Office of Thrift Supervision (1-800-842-6929) it took them about 2 wks to contact me then 2 more weeks to push my 2nd application through (so after I turned in my 2nd appl it probably took about a month). If I were you I would file the complaint as you do have a circumstance with them lying...you will get where you want to go alot faster and they won't mess with you anymore.

[wealth2008]

The $211k is what you will owe after 25 yrs. Since your payment is so low, you are paying almost nothing toward principal. And the $211k will include the $14k non interest bearing portion. I have know way of knowing if these figures are correct, but if you owed 368k to start with, and they defer $14k, you would be making payments on $354k. This comes out to a $1072 payment @2% amortized over 40 yrs. $1072 + $418= $1590, which is pretty close to your actual payment. I did the math, and it appears right, but instead of extending the loan out to the full forty years, you are making payments based on forty years, but after 308 months, you will need to pay off the balance. You will probably be able to refi by then.

I don't think Erik caught all the details correctly. This is a little confusing if you don't get the entire picture. He should have been tipped off by the forbearance amount of $14k because they don't forbear under HAMP unless the term is extended to 40 yrs first.


So AMGBEST- this is a good and correct mod. If you pay extra, it will mean the payoff date comes faster, so pay other debts first before paying extra on this loan. Extra payments don't go toward the ballon payment, and as soon as you pay off the first, the balloon will become due, unless you make a huge prepayment.

In my case they did forbear under HAMP, without extending my loan out 40 years .... I currently have 24.5 years remaining under my HAMP mod to payoff the mortgage. Hmmmmm