Sisters bank threatening to take her home. she is ahead on payments but the home is worth much less than the..?My sisters bank has called her threatening to "recall" her loan. she is ahead on her payments by 8 months, has never made a late payment on anything, and has outstanding credit. i have seen her finances and other than the fact that her home has dropped in value so much that her loan from several years... |
Your sister is not "ahead" 8 months on her loan. Banks don't accept payments for future months ahead of time. She needs to be making at least the minimum amount due EACH MONTH.
If she sent in 12 months worth of payments in January, they considered her to have made the January payment, plus a bunch more toward the principal.... if that was the last payment she made, then she missed Feb thru November payments, and the bank considers her to be 10 months BEHIND in payments.
There is no such thing as "being ahead on payments". Find out what she means by that and which months the bank has not received payments for - work out the misunderstanding with them.
Hello Isaiah
The bank cannot just call a mortgage due - UNLESS the mortgage is a balloon mortgage. A balloon mortgage is a mortgage that starts with a term of a certain number of years, and then the balance becomes payable. Sometimes people might have a mortgage payable with regular payments for 7 years; after the 7 years, the balance is due. That's where the term "balloon" comes from.
This is a very uncommon mortgage. Most people don't know what it is and should not have one. Such a loan is designed for people who know they will be selling/moving in a period of time. People like corporate executives who float from city to city for their companies. It's a great mortgage for them.
I have been in the mortgage business for many years and I have seen just five people have a balloon mortgage - 5 out of thousands.
I recall 2 of them were not aware they had a balloon mortgage.
Your sister should just ask the bank "why" they are calling her loan due. And she should take a look at the mortgage she signed and see if it is a balloon mortgage.
Banks have no right to call a loan due because the borrower is under water. Not in the contract.
By the way, If she has paid 8 months payments ahead of time, she is very unusual. If she is that under water, it would have been better to keep that money in the bank and pay the bill when due.
Good luck.
I've been the mortgage business for about 12 years and have never heard of anything like that. When a lender calls a loan, there must be a valid reason. The reasons are these: the house has been sold; the last borrower died; the real estate taxes are unpaid; the home owners insurance is unpaid; the house has fallen into total disrepair.
If her house has dropped 75% in value, why doesn;t she just walk away and foreclose?
where does she live that real estate prices have dropped 75%???
she will never me able to sell it unless she pays the full 30 yr mortgage (which will actually mean she pays 3-4 times the original price of the house with interest) and then it will still be worth a lot less than she paid for it
she is just throwing money away
it makes absolutely no sense that the bank would be bothering her AT ALL if she was paid up to date, never mind paid ahead by 8 months. There has to be more to the story.
I'm paid up to date on my house and I estimate it worth about 20-30,000 less than my mortgage balance, and my bank doesn;t bother me at all
If the bank is doing this, there was most likely a "call" in the original loan agreement where they have the option to call it due. Even though your sister is a good credit risk, the rest of the area may not be, and they would rather have their money now.
No, they can't do this. First of all, the bank doesn't own the home - your sister does. Second of all, I am a little skeptical that everything you've said is truthful. Right now, banks have their hands full with people who are delinquent on their loans. They have nothing to gain by harassing homeowners who are making their payments on time. The mortgage is a contract. Tell your sister to contact an attorney.
Why would the bank foreclose on a good loan ????????? Your sister is not telling the truth, and when something does not make sense then someone is lying. The lender is not going to waist time and money on something they can not do or need to do, end of story. Your sister can tell you what she wants, but it is a bunch of crap.
what the bank is doing is illegal. Record the conversations. In Court, the damages she can win will
pay off the debt.
Seriously!
[is there any chance that an enemy is calling instead of the bank?]
get back to me!
[also, not sure HOW the extra payments are being made, but try this--
have her make the regular payment when she does.....and on that same day,
write a 2nd check endorsed TO BE APPLIED TO PRINCIPLE ONLY.]
on the 15th of the month, try to do the same thing again. That way, in
1-2 yrs she will have the principle paid down to 1/2 what it is now.
what city-state is she in?
Unless she has a mortgage with an unusual clause, she should be fine. She should make an appointment to speak with a manager in the mortgage department. Only if they can point out what clause she is violating (not likely) does she need to consult a real estate attorney.
