Please Help Me Understand Mod Paperwork

StuckInLimbo

LoanSafe Member
We were sent the trial modification papers which noted a mod for $207,000, a 40 year mortgage, $1200/mo, with a balloon of $35,000 due at the end of 40 years. We made our trial payments and received the final mod. paperwork, however what they outline is TOTALLY different from the original paperwork.

It says total principal balance is $242,000. $35,000 of new principal balance will be deferred. Okay, so far so good, I understand. Now here's where it gets confusing. There's a table that shows years 1-21 $1200 monthly payment for 246 months (20 years.) The second line in the table says in bold "A final balloon payment on the Interest Bearing Principal Balance of $142,000 is due on the Maturity Date (July 1, 2035.) Okay, I still understand, however below this, there's a paragraph that says "The Deferred Principal Balance of $35,000 will be due as a balloon payment on the earlier of, payoff of the Interest Bearing Principal Balance, transfer of the property, etc., etc."

Does this mean at the end of 20 years we owe TWO BALLOON PAYMENTS FOR $142,000 and $35,000??? NPV of the house is 180K and our the original purchase price was 250K.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
That confused me as well. So I do not blame you.

Is this a 40 year amortized mortgage due in 40 years or due in 20 years? Even if you pay $1200 over 20 years that is $288,000 in payments.

If it due in 20 years, then yes, 2 balloon payments of $142,000 and $35,000 seem like right figures. But if it is due in 40 years, then no.
 

StuckInLimbo

LoanSafe Member
UPDATE: I am so happy right now, I could scream!!! We signed the mod. paperwork and sent it in. Yes, 2 balloons due in 20 yrs (but that's not what I'm happy about.) We had said if they come back on the 2nd mortgage (original was 45K), that would be the determining factor to decide if we walk away.) Back in November, I wrote to the CEO, pleading for some help. We never heard back so I figured it fell on deaf ears. Today, I received a letter from SPS, which references our 2nd mortgage account number, stating "SPS is informing you that your mortgage loan is satisfied. Please find the original satisfaction/reconveyance documents for your mortgage loan enclosed." The document titled "Release of Mortgage/Deed of Trust" is dated December 30, 2014. Am I reading this right??? Did they really wash away our 2nd mortgage? I'm wondering if the letter is the reason why we also got a 20 yr mortgage? What are your thoughts????
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Congratulation on the good news. Yes, based on what you stated the paperwork says, it appears your 2nd mortgage has been extinguished. I do not know why, but maybe so....
 
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