ILL, ILLITERATE & Seeking Help on Note Modification

WE GOT A MORTAGE ,BECAUSE WE WERE IN A SITUATION THAT WE WERE NEEDING HELP BAD, DUE TO ILLNESS (MY HUSBAND HAD HAS 2 CANCER SURGERIES) . WE DID NOT WANT TO LOOSE OUR HOME WE HAD WORKED SO LONG FOR, SO WE ACCEPTED THE MORTAGE. AT THE TIME, WE WERE SO DESPERATE TO SAVE OUR HOME, WE SIGNED THE PAPERS. NOW WE LEARN THAT 100% OF ALL MONEY PAID IS ON INTEREST ONLY. NONE OF THIS IS APPLYING TO THE PRINCIPAL OF THE LOAN. MY HUSBAND CAN NOT READ OR WRITE VERY WELL, AND THE BANK MANAGER EXPLAINED THE LOAN TO HIM, BUT I SOMEHOW BELIEVE WE ARE BEING MIS LED. PLEASE HELP US, TO SAVE OUR HOME, AND EXPAIN WHAT WE CAN DO TO FIX THIS. WE ARE ON A VERY SMALL INCOME, AND WANT TO KEEP OUR HOME THANK YOU VERY MUCH

Hello,

I am so sorry to hear about your husband's illness. I hope that his surgeries were a success and that he is well again! I am concerned that your husband signed documents without the assistance of a literate advocate. This is something that you may want to share with a professional loss mitigation company (there are thousands of them: google one in your area). Be careful, however, and do not pay anything upfront. Most are working on a success fee now. In other words, they do not get paid unless they successfully negotiate your loan. MAKE SURE TO MENTION THE CIRCUMSTANCES AND THAT YOUR HUSBAND IS ILLITERATE!!!! Lenders are not the bad guys they are made out to be. They will likely assist you in some manner: lower rate, longer repayment terms, both, etc. Review some of the blogs in the past on this site. You may find some helpful insight.

MortgageMaster

Debt Forgiveness For Those With Severe Medical Costs

Hi,

Do mortgage companies ever forgive an entire home loan debt ($102,000.00) because of medical reasons? I ask because of severe health problems in my family and medical bills we can't get on top of, even with our credit card. Mr. Warren Buffet recently paid off our credit card and a home equity loan because of our need. But our house payment is nearly half of our monthly income. (We are living on Social Security Disability). Thanks,

Denise


Dear Denise,

Please forgive my more-than-tardy reply: This e-mail was lost in my e-mail files!

I am really very sorry to hear about your medical issues. I hope everything turns out well. To answer your question, simply: It is up to the lender. The fact is that if you are behind, you have several options for a loan modification: lower rate, longer term, a combo, etc. Lowering the principal is certainly not unheard of, but much less common...even in these crazy times. Given your circumstances and the likelihood of some media attention that you received re: Mr. Buffet's generosity, you may be able to get the lender to help. Even if the lender extended your term and lowered your rate, you would be better off than you are now. Just remember, you get more with honey than you do with vinegar. In other words, the lenders want to help. They do not like to be yelled at or assaulted. This is not advice directed specifically at you, but at all those who are looking for loan modifications. Good luck!

MortgageMaster

I Am Paying Too Much Toward Interest!

Good day,

I have concerns that my financial institution (RBC) has made too much money from the interest off my mortgage (You and me both, brother, you and me both!) and I should be able to negotiate terms in lowering my interest rate or at the very most pay principal only (not likely). You may be able to negotiate terms, but it will likely result only from being delinquency on your part. Unfair, I know, but it is the way things are right now.

I’ve lived at my residence for just over 11 years. I originally borrowed $85,000 to buy it.The home was built in 1901 and has had significant upgrades, but marketable for about $90,000.I have re-mortgaged twice, once in 2002 when the balance I believe was around $77,000 for $104,000 to consolidate debt, go back to school and another time in 2007 for the amount owed then, approx. $89,000.I still owe $87,000 on the house and over the course of 11 years I have given the bank approx. $88,530 total principal and interest. I do know that since I have re-mortgaged a couple times, I would have to “bight the bullet” about the amount of dollars paid.But is there rules a bank must follow in order to not take advantage of a client who has obviously paid into a mortgage enough? I know it sucks, but mortgages are "front-loaded" regarding interest. In other words, the VAST majority of your payments will go to interest for the first many years. It is only in the last ten years that you really clobber the principal! Thus, by refinancing as you have, twice, you keep starting the "interest-clock" ticking! The bank is following rules as allowed and as drawn-up in your mortgage note. Do not feel as though you are a "sucker", your mortgage is not likely any different than all the other mortgages out there. I have 148 months remaining on my term at a monthly payment of $769 equalling an additional $113,812 to the already $88,530 totalling $202,342 for a $90,000 home. I truly don’t see the cost advantage. There is not cost advantage, per say. The advantage is in tax deductions and appreciation of value: I do not know the present value, but it is likely to be substantially higher in 148 months. In the meantime, you are also writing off the interest. Home ownership is still a great investment OVER THE LONG RUN! What can I do? Please help any advice is greatly appreciated. Apply extra toward the principal every month or make an extra payment every year. This will reduce the amount to be paid and the time that you continue to make payments. Good luck!

Thanks kindly, Mark

Mis-applied Check?

MortgageMaster,

My homeowners sent me a check for damages to my home, which I sent to my morgage Bank to endorse and return. This was in Sept. all repairs have been completed, I can not get my morgage company to reimburse me for repairs to my home. I think there is federal regulations ,that a morgage company can only hold your insurance check for a certain lenght of time.Please let me know this ruling from the Federal Government.thanks

Hello,

I am not familiar with the regulation that you are writing about. As far as I know, HOA's are regulated by the state(s) they are located and/or operating in. This is also true of mortgage lenders. Thus, I would contact the appropriate state or federal agency to get the correct answer. Based on your e-mail address and a little "googling" on my part, I think you are in California. It does not sound as though you need help with the HOA, but rather, the lender. Lenders can be regulated by a bevy a different organizations. In California it can be California Department of Corporations, FDIC, California Department of Financial Institutions, California Department of Real Estate, etc.

The first thing I would do is look at your October statement and see if the endorsed check was applied as a payment to your mortgage. If so, ask a supervisor to void the transaction and send you a check (you may need to prove the work has been satisfactorily completed). If not applied to your mortgage, where was the money applied (assuming the check was cashed?: Check with the HOA)? If the check was cashed, you are entitle to know where it was applied. It sounds as though there is more of a lack of communication than something nefarious. If the check was not cashed, you are back in the driver's seat. Good luck!

MortgageMaster

Spousal Abandonment: Who Pays The Mortgage?

Dear MortgageMaster,

My (ex) wife and myself have joint names on mortgage agreements some 3 plus years ago. She has left the marriage with no apparentintent on paying her share of payments. She has departed to the Mid West states (U.S.) Kansas City, MO. Before she left she told me if I was to sell her assets, and property she wanted half of profits. When she departed the mortgage owing was $ 90,000 with total debts ( matrimonial ) over $ 25,000.Are there laws in N.S. concerning abandonment of marriage, especially, concerning debts incurred since marriage.

Dear Sir,

I am sorry to hear about your sad turn of events. Unfortunately, I have absolutely no knowledge of Canadian law. Even in the U.S., the laws from state to state differ regarding mortgage obligations. In California, for example, whoever signs the mortgage paperwork as a borrower is responsible for the mortgage, regardless of changes in marital status. You need to speak to an attorney. Sorry I could not help!

MortgageMaster

Can I Pay 1/2 My Mortgage Payment Twice Per Month?

Dear MortgageMaster,

I have spent the last 6 months splitting my mortage payment in half. I will send half the first week of the month and the second half no later than the 18th of the month. I have explained to them that I am a childcare provider and that I pay them as much as possible as soon as possible. I have asked for my due date to be reset for nine consecutive months to reduce or eliminate the late fees that continue to accrue on my account. They refuse to do so. My question is, is there a regulation that mandates that the mortgage company applies funds as received and re figures interest on the outstanding principle or can they hold the funds unapplied and continue to collect interest as if no effort or money was received? My mortgage company it First Franklin Financial Services

Julie

Dear Julie,

Insofar as a regulation that mandates that a mortgage company accept your 1/2 payments as they are received, I do not know of any. Nor am I familiar with any mortgage company that will accept 1/2 payments twice a month on First Mortgages. Since HELOC's are lines of credit, you can arguably use this payment method as long as both 1/2 payments are received before the "late" date. Macquarie Bank, an Australia-based bank, has a heloc first that can be used in the manner you are talking about (as could any Heloc 1st). Other than a Macquarie First, I do not know of any lenders who are set-up to accept payments in the manner described. Perhaps you can try and put aside one payment over the next few months, put it in a separate checking account, and then when you have enough saved up, send it to the lender. Then you will always be on schedule. Also, given the current markets, you may be able to negotiate a loan modification changing your due date. Lenders are becoming increasingly flexible! Good luck!

MortgageMaster

Kentucky Homeowner

MortgageMaster,

I'm in search of some mortgage regulations for the state of kentucky. My primary question is, how long must i be in a home before i can re-sell it? also, questions relating to that with regards to taxes, etc. if i'm in a house for a year and a half, what willhappen when i sell it? is there any fine/fee/ are any gains taxable?
if yuo have any answers, or a reliable location wherei might find them, i would greatly appreciate it.
Regards,Jeremy

Hi Jeremy,

You need to speak to a CPA. I AM NOT OFFERING THE FOLLOWING AS ADVICE, BUT SIMPLY MY OBSERVATIONS OR KNOWLEDGE. PLEASE CONFIRM WITH A TAX PROFESSIONAL: Generally, there are no taxable gains on a property (if < $250k/individual or <$500k for a couple) as long as you have lived in that property for at least two of the past five years, cumulatively). Thus, it makes sense to me that 1 1/2 years may have create a taxable event (it is less than two years, altogether). I am not sure if Kentucky has anything different from the above.

MortgageMaster