Hamp Loan With Balloon - Payoff Quote Seems Low?

[Opptimistic]

Hello!

I have a pretty basic question. I have been in a HAMP loan for the last three years. It has a deferred balance and a balloon that ends up being the equivalent of about $6500 per year of the loan.

My lender is Ocwen, and I just asked them for a payoff quote. I was curious on what I owe compared to the homes value. The quote seemed low.

Do payoff quotes include the balloon payments for that time? Am I to assume that were I able to actually pay off my mortgage that the quote they gave me is all that I could be billed for?

Thanks in advance!

 

[Moe Bedard]

Hello,

It should be on there. But sometimes they do not include the balloon and I assume this is what may have happened here. Especially if it doesn't seem right to you. Did you try to do the numbers and or compare it to your loan modification numbers?

 

[Opptimistic]

Hello,

It should be on there. But sometimes they do not include the balloon and I assume this is what may have happened here. Especially if it doesn't seem right to you. Did you try to do the numbers and or compare it to your loan modification numbers?

Hello,

It should be on there. But sometimes they do not include the balloon and I assume this is what may have happened here. Especially if it doesn't seem right to you. Did you try to do the numbers and or compare it to your loan modification numbers?

Hello -
Yes, I did review the numbers, and that is why I questioned it. They do not spell out a balloon payment due in the documentation, either. I just didn't know if it is common practice to include or exclude that number when providing a pay off quote. Seems strange to me to leave it off, considering if I were really planning on doing that, I would have an incorrect figure.

Thanks for you input, though. I appreciate knowing that they can, in fact, come back and add it in. I am trying to stay on top of how much my house is worth vs how much more I am accruing with this balloon payment every month.

 

[Moe Bedard]

You are welcome and best of luck!

 

[JSS]

I believe, in some cases, the modified loan requires monthly payments that will not pay off the full principal by the end of the mortage term, so there will still be a balance due at the end of the term.....a balloon. But, this simply represents the remaining principal balance on your loan...so if you sold or refinance before the end of the term you'd simply owe the current principal balance and there would be no balloon payment due.

For example, as best I can figure with the incomplete information provided with my loan mod, the bank figured out what my payments would be if they amortized the loan over 40 years, and set my P&I to that number BUT my term is only 24 years. Furthermore they changed the ratio of principal and interest so that it's more interest and less principal than the 40 year amortization indicated. (I do not have any principal forbearance). As a result, at the end of the 24 year term of my modified mortgage I'd still have a principal balance of over $200k, that would be due, as a "balloon payment" . However if I sell or refinance before the end of the 24 year term I only owe the current principal balance...which won't be a hell of a lot lower than my original balance since I'm paying mostly interest on the entire balance every month and very little principal.

I should note however that the language in the loan mod is very sketchy, so I can only back into this explanation by using a standard mortgage calculator to see which variation matches the payments I've been making for a 24 year term. The numbers that match fit the scenario I described above....so I'm fairly certain I've got this right.