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blshelby · Joined: 31 Aug 2010 Posts: 1 1.42 Dollars($)

I have a Pay Option Arm. It adjusts every year. It is set to adjust again this year and we will no longer have any "options" to make the minimum payment, interest only, etc. We were told this loan should be refinanced withing 5 years, But , the home is way underwater and we can't sell and the bank won't modify. The question is-- will this be the last time they adjust the loan? Maybe a better question is--Once they do adjust this-- will will be locked in for the life of the loan? We managed to erase the negative am and right now, we are tied to the MTA rate, which is super low. Thanks for any info.

jerry · Posted: Wed Sep 01, 2010 2:03 am Post subject:

Hi blshelby,

As it's an adjustable rate mortgage, the interest rate will not be locked once it adjusts this year. Unless you refinance the loan into an FRM, you won't be able to lock the rates.

Thanks,

Jerry

Posted: Wed Sep 01, 2010 6:20 am Post subject:

Are you kidding me?
The Truth in Lending statement shows that the remaining 300 months or 25 years --will stay the same. However, the TIL wasn't really truthful as far as the negative am. How often do they adjust this once the 5 years has passed?

gmakerley · Posted: Wed Sep 01, 2010 10:22 am Post subject:

You've got to be able to recognize that there are, undoubtedly, a variety of Option ARM loans out there - some that might continue to be adjustable, some that are fixed. What you need to refer to is not the GFE - which, after all, is only an estimate by definition - but your Mortgage Note. The note will set out the terms of changes to be made, and you'll be able to determine precisely what you're facing in the future.

Posted: Wed Sep 01, 2010 2:18 pm Post subject:

Thanks Mr. Akerly,

That's the problem. I have looked at the Note and it looks like it could mean whatever they want it to mean. Is there anything special to look for in the Note?

That's why I took another look at the Truth in Lending statement. Thanks for nay help.

How do I get out of this mess? We had no problem with refinancing back then-- but now we are stuck, we can't refinance and we can't sell and the bank refuses to modify this predatory loan.

gmakerley · Posted: Fri Sep 03, 2010 10:10 am Post subject:

If you can't make out the terms of the note plainly, then I suggest you consult with an attorney, paralegal, another lender who might be receptive to answering your questions (plus the possibility of obtaining a refinance transaction from you). Each of these, if they have sufficient education and training and experience, ought to be able to decipher the terms and advise you further.

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Pay Option Arm due to adjust after 5 years