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robminion · Joined: 18 Jun 2008 Posts: 2 1.86 Dollars($)

Our 30 year fixed rate mortgage is due next April. We've always payed our payments on time and have never had any problems. We wre really looking forward to finally completely owning our home and being through with the payments.

Then for whatever reason we decided to do the math. We found out that there is NO WAY our loan will be paid off by the final payment date. We will still owe several thousand dollars. We found out that for all these years, the mortgage provider has been under billing us. We should have been paying about $80 more per month than we have been.

I can't believe we've never done the math before, but we just took it in blind faith that everything was perfectly planned out by our provider. The contract states that the loan is to be paid in full on the date of final payment and there IS also a clause in the contract that states any discrepancy would also be due on the date of final payment. We'll, the discrepancy is over 20 thousand dollars and we are not prepared to handle that kind of lump sum due in less than a year.

Now, I've had some friends tell me what the provider is asking for is illegal. That we signed the mortgage "In Good Faith" that the payments would be planned out properly to be paid in full via the monthly payments up until the 30 years have expired.

I've had others say that it was our fault for not making regular check ups on our mortgage. Can anyone shed some light on this? Is the provider at fault for not having the paymenst balanced properly or are we at fault for not checking up on this sooner?

More importantly, what are the outcomes for both scenarios? If the provider is at fault, do we still owe the money? I've been told by some friends that if they made the mistake then we are absolved of the final lump sum. I've also been told that even if they are at fault, we still owe the full amount in a lump. I've also heard that the bank may settle for a smaller sum or extend our payments until the debt is payed in full.

And what if we are at fault? Will the bank demand full payment or will they possibly work out extended payments?

I would sure appreciate some help on this, as all of the people I've spoken to say they have never even heard of anything like this happening...

Niicss · Posted: Wed Jun 18, 2008 5:50 am Post subject:

Welcome Robminion.

I feel you should contact with the lender and consult with him about this. Is he asking for the money that will not be paid or is he said that even after completing the loan period you will still have a lump some amount due. If not then it may be that your math is wrong. So consult with the lender and ask him about this problem.

By the way if you still owe a lump some money after completing the loan period you may need not to pay it all if you consult with the lender and come to a settlement.

Keep us posted and let us know about your situation Smile

Samantha

Hi Robminion,

Welcome to the forum.

Frankly speaking it's a mistake on your part as well as on part of the lender. Perhaps he did some miscalculations but I'm surprised that he did so. This is very rare actually. Now that it has happened, I feel you are lucky to have found it out. Otherwise you would never have known that you have so much left to be paid.

Anyway, the best thing to do now is to call up the lender and tell him what you have found out. see what he has to say. If he says that you'll have to pay the amount which you haven't for so many years, then explain it to him that it's not possible and negotiate with him for a lower payment.

Let me know what he has to say and then I can suggest something based on that.

God bless you.

Samantha

Posted: Wed Jun 18, 2008 7:29 am Post subject:

“30-year fixed rate” is not necessarily synonymous with “fully amortizing”. Also there is the 360/365 day ploy although it is not VERY uncommon in residential loans (interest calculated on a 360-day year and charged on a actual days basis. (works alright but some lenders didn’t “up” the P&I from fully amortizing one -- $80 per month is a stretch for this unless you have a major mansion).

Look at the Truth in Lending form you signed – this will give the payment stream. You may well have agreed to something you thought was a good move 29 odd years ago and forgotten about it.

robminion · Joined: 18 Jun 2008 Posts: 2 1.86 Dollars($)

Thanks very much for your input and advice. You've been very helpful. I'll look into this further and post my findings...

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi rominion.

I have to agree with the above posters. You should consult with the lender to clear this confusion. I do not think the lender will such a miscalculation. So better talk to him ASAP and see what he has to say about it.

Best of luck,
Larry

laphillips

I have to agree with the others...talk to your lender & find out what his position is. Was you loan fully amortized? If not there could be a baloon payment due.

One of the most important documents you sign in your loan package is the Truth-in-Lending statement (TIL) it gives you the basics of the agreement you are signing.

Oh, and unless you friends are attorneys, please stop getting advice from them.

Posted: Thu Jun 19, 2008 6:13 pm Post subject:

Weird thought. Did you get one of those “enjoy your Christmas’ skip a payment”? Common with car loans; haven’t really seen it with home loans. They charge a fee and the mark (i.e., you) makes the irrational logical jump to assume this adds just another payment at the end. Run the actual numbers, especially with a 30-year term, and you’ll see what can happen. $20K – entirely possible.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Guest.

Welcome to the forum.

You seem knowledgeable and have the experience about this industry. So why don't you
Join this community as a mortgage professional. There are so many professionals and lenders in this community. So you can join this community and be one of them. Please have a look at http://www.mortgagefit.com/community/professionals.html

You can also introduce yourself to let the community know about yourself at http://www.mortgagefit.com/introduce-yourself.html

Hope you will enjoy participating here in this forum.

Best of luck,
Larry

gmakerley · Posted: Fri Jun 20, 2008 1:33 pm Post subject:

I have never heard of a situation like this. I am in agreement - consult with your lender to see what resolution can take place. It would make sense to me that they make some sort of arrangement, and not try to call the loan.

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30 year fixed due in April but there is a problem