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Loan Modification Rate Increase

Discussion in 'Loan Modification' started by modmyloan, Dec 10, 2013.

  1. modmyloan

    modmyloan LoanSafe Member

    I wondered if I might ask you a question regarding an in-house modification that I received from GMAC in 2009. I had a negative amortization loan in 2006 which went from $675,000 to $750,000 by 2009. Because of the larger mortgage amount, I didn't qualify for government modification so they did an Interest Only Loan Modification at 2.875% for first 4 years that would go up 1% a year until it reached 5.125 in 2015. I signed and had the document notarized, sent to them but never got any paperwork regarding the loan. I have been making the new payment since 2009 and first interest rate increase was supposed to have happened on December 1st payment.

    GMAC transferred the loan to Ocwen which I called, the person stated that they didn't see any increases until 2019 when the loan would go from interest only to principal and interest payment. I also went to their website and printed the document that states I have a fixed rate of 2.875 for the life of the loan.

    Do you feel there could be any issues should I continue to make the same payment which is on the mortgage statement even though the document that I signed stated increase at this time. I'm wondering if they might have turned it into a fixed rate modification without my knowledge. I initially called trying to get some type of help with the new payment which would have been an extra $600 a month. The current payment is still doable and hoping payment continues at the lower rate.

    Thanks for any feedback, greatly appreciated!
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Welcome and thanks for joining the LoanSafe community modmyloan.

    You're in a tricky situation here as it seems that Ocwen may be going off your original loan terms and not the modification you received back in 2009. The modification should have passed to your new servicer (Ocwen) and the payment/interest rate should adjust accordingly with the terms of the modification. If this is the case and Ocwen is not honoring the mod, you will still be on the negative amortization loan and can expect a major increase once the loan adjusts in 2019. The payment increase would be substantial at that point and will likely cause you another financial hardship. Did they state that your monthly payment currently includes principal and interest? Or are you now paying interest-only?
  3. modmyloan

    modmyloan LoanSafe Member

    Thanks for the feedback! I am paying interest only so not negative now and only goes to fully amortizing in 2019. I looked at my modification agreement and interest rate should have been going up last month. I could deal with an increase in 2019 but the payment now works and would like to continue to make this same payment. Could servicer come back at future date and negate the agreement or tack on penalties because of a mistake on their part with the payment?
  4. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    I do not see this happening, if you would like to continue paying IO and enjoy the low monthly payments it may be in your best interest to keep quiet and not question the terms of the account.
  5. modmyloan

    modmyloan LoanSafe Member

    Just received the increase with my new statement, all for not. Will pay the increased payment and see if I can work with Ocwen on future modification.

    Thanks again for your input.
  6. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Wow that was fast! Did your payment increase accordingly with the modification you received in 2009?

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