| Junior Member
Join Date: Oct 2008
Posts: 2
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Need help now
I am trying to help my 70 year old Mother save her home and business property. My parents owned three properties all side by side, one contains a small rental house, one contained a small building my Father ran his business from and one contains the home I grew up in and my Mother has lived in for the past 45 years, as she still does. My late Father needed to build a much larger store / warehouse. In order to do so, the city required that the properties all be combined into one single property. My Mother refinanced the property in Dec of 2006, and because the property is considered a “mixed property” she could not get a regular mortgage, it needed to be a business loan ( I need to mention that on the application it states property type will be “primary residence“). Unfortunately I was not involved in that transaction and have just recently seen the loan documents. The terms of the loan are outrageous, 10.5% adjustable interest on $893,000.00, payment of $8300.00 and in case of default (which they say she is in), the interest adjusts to the original interest of 10.50% PLUS 10% for a total of 20.5% (or the maximum legal amount if 20.5% is not legal). A prepayment penalty for 7 years, I believe 5% of the principal balance PLUS the remaining interest the lender would have been paid if the mortgage had not been paid before the 7 years ended ( if she sells 3 years after the original loan date she would have to pay 5% of the remaining principal balance plus interest the lender would have received for the next 4 years). Also included in the loan documents is a form stating that because this is a business loan, she gives up her right to any protections most laws would otherwise protect her, mainly the truth in lending act, among others.
In Aug of this year she was late on her mortgage for the first time. After contacting the company servicing the loan (M & T Bank) and explaining that she would also be late the following month they recommended she try to get a loan modification. They sent the package with the necessary documents she needed to fill out and a list of the additional information she would need to submit. She submitted the documents on time only to then be told that the loan had been sent back to the original lender, Bayview Loan Servicing, M & T also forwarded the modification package to Bayview. When she called Bayview they told her not to send in any payments until the modification had been worked out. (she was then 2 month’s behind) . A few weeks later they informed her she was 3 month’s behind, in foreclosure and needed to send 2 month’s payment’s which she did. After finally getting to the right person, they contacted her telling her she needed to submit additional documents before they could make a decision, she informed them she would need to get her accountant to send them . The very next day they called her to inform her that they had worked out a modification, which sounded very good over the phone and would overnight the documents to her, that was on Oct 15th, she did not get the docs until Oct 20th. It stated they would reduce the interest to 8% for 2 years, payment would be $6780.00 (after that loan would convert back to original terms), the next payment would be due on Dec 1st, they were adding $14,000.00 to the principal , she needed to submit $7200.00 and the documents to them by Oct 24th., giving her 3 days to make such an important decision My main question’s at this point is can a lender at the last minute change the terms of the loan and then make her sign documents stating she gives up her rights of protection under most mortgage laws. I called them on Oct 21st and they did agree to let her have until Oct 28th to submit the docs and $7200.00, When I asked about being in default , I was informed she would still be in default, the default interest would apply after 2 years, which if I am understanding correctly would be around $15,000.00 per month.
At this point I don’t know if I should counter offer, or if that is even a possibility. If she does not accept the proposed modification by the date they are demanding, I don’t know if they will then just reject a modification completely. Has anyone on here received an offer that was not acceptable and then successfully negotiated for a more favorable modification? It appears to me that this “rush to sign” is a scare tactic to make her agree to a modification that will put her in a MUCH worse situation after 2 years than she is in now. The property appraised at $200,000,000.00 when she got this loan (bare in mind this is her business and home they are messing with) and I have no idea what it would appraise for at this time because of the unique “mixed property”. She recently sold a rental property at a great loss to make bring this mortgage current and have some money set aside to assure that if a modification is completed, she will have some cash to help keep it current. I have tried to read as many of the post’s on here as possible, and I am sorry for the long post I have submitted, but them giving her only until Oct 28th to complete this modification I need to know what to do within days.
Lastly, I know many of the questions I have asked are legal in nature and am fully aware that any advise I may receive on here would simply be suggestions and not legal advise. I need an attorney to at least answer some basic questions. I have contacted J Griswald’s office, but to be perfectly frank, I see many wonderful things being said about them on here, but I have yet to find even one case where they have successfully negotiated an acceptable modification, so PLEASE if anyone has had success with that firm, or any other legal firm negotiating a successful modification I would love to hear from you. Any suggestions or comments would be greatly appreciated. Best of luck to you all, and thank you in advance for your time.
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