Just rec'd HAMP approval paperwork last week and everything looked good until we noticed that there is a HUGE balloon payment in 25 years in the amount of $450k+!!! Servicer is AHMSI and I believe investor is Wells Fargo.
Principal balance is $672k
Original payments: $3394 (interest only)
New Principal Balance: $731,537
Deferred Principal Balance: $99,637
Interest Bearing Principal Balance: $631,900
1-5 Years: 3.063%
Payment: $3,366 (PITI)
6-25 Years: 3.875%
Payment: $3,642.49 (PITI)
25th Year: $452,837
Everything's fine except this HUGE balloon in year 25!!! We have to sign papers by 2/16. The phrase that gets me is "interest will now accrue on the unpaid interest that is added to the outstanding principal balance, which would not happen without this Agreement". Seems like the interest would be compounding which explains the huge balloon???
Trying NACA to see if we can get approved through them. Can NACA do any better? Is it possible to get a 2% mod over 30 years with a smaller balloon? I have never heard of anyone having a balloon this big. We would have to set aside at least $1,500 every month for the next 25 years to avoid this huge balloon payment. Otherwise, we'd have to get financing which would be starting all over again. This HAMP modification makes no sense. Will working with NACA affect the HAMP offer we have now? Should we travel to the next NACA event to see if we can do better, or just accept this HAMP modification and pay "rent" and plan to move in 25 years.
Any suggestions anyone ...