Two Second Mortgages

[Linda2341]

A couple of years ago we called a local mortgage company and started the process of getting a loan. This was a very well-known company and advertised on our local Christian radio station very heavily. We trusted them. We are hard-working, honest, Christian people that have never had much savvy in finances. We have had financial problems trying to keep three children in Christian school and college. Before attempting to see if the company could help us, I had remembered that we had a "second-mortgage" already, having answered a postcard invitation and taken care of it completely by phone. I reasoned that there surely could not be two "second-mortgages" but forgot about it feeling that any loan officer would know by our information we submitted and the acquired credit report if we qualified for this loan. We did not intentionally withold any information. We were approved for a consolidation loan and left very pleased. This left our first mortgage intact and created a second "second-mortgage". We made the payments in a timely manner and were doing well when we received a call from our loan officer approximately nine months into the payment schedule. He informed us, very nicely, that the adjusters had found the two second mortgages and could legally demand full payment but if we would come in, he would see what he could do to help us. We, very gladly, came in and gave him all that he requested. We left there with a loan which contained our first mortgage and both second mortgages for a grand total of about $170,000 at an interest rate of 10.75%(?). He apologized for the interest rate and told us to keep up with the payments and come back in a year for a possible refinance. We followed his advice and even forced ourselves to add an extra $100 each month onto the principal. When the year was completed, I called to speak with our loan officer and was told that he was no longer with the company. The insinuation was that there was nothing that could be done. After much thought I called again and was given to another gentleman who attempted a refinance. We were, of course, turned down as our house does not appraise for anything near the $165,000(?). As a matter of fact, the assessors office lists the value at $99,000, though a smaller home in the same subdivision recently sold for $121,000. We desperately need to lower our payments from the $1734 to something more reasonable. The locked in rate would have brought our payments down some $400-$500 monthly. Is there anything that we can do with this loan? Also, we found in our research that we have a 15 year loan with a large balloon note to follow. HELP????PLEASE!!!

 

[HomeGuru]

A couple of years ago we called a local mortgage company and started the process of getting a loan. This was a very well-known company and advertised on our local Christian radio station very heavily. We trusted them. We are hard-working, honest, Christian people that have never had much savvy in finances.

A: these things have nothing to do with you qualifying for a loan.
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We have had financial problems trying to keep three children in Christian school and college. Before attempting to see if the company could help us, I had remembered that we had a "second-mortgage" already, having answered a postcard invitation and taken care of it completely by phone. I reasoned that there surely could not be two "second-mortgages" but forgot about it feeling that any loan officer would know by our information we submitted and the acquired credit report if we qualified for this loan.

A: you are correct because the mortgage that you got was a third mortgage not a second.
Also, the mortgage company requests a title report and it is on this report that the second mortgage would be verified.
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We did not intentionally withold any information. We were approved for a consolidation loan and left very pleased. This left our first mortgage intact and created a second "second-mortgage". We made the payments in a timely manner and were doing well when we received a call from our loan officer approximately nine months into the payment schedule. He informed us, very nicely, that the adjusters had found the two second mortgages and could legally demand full payment but if we would come in, he would see what he could do to help us.

A: at this point you should have consulted legal counsel rather than believeing some screw-up loan officer.

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We, very gladly, came in and gave him all that he requested. We left there with a loan which contained our first mortgage and both second mortgages for a grand total of about $170,000 at an interest rate of 10.75%(?). He apologized for the interest rate and told us to keep up with the payments and come back in a year for a possible refinance.

A: you did not just leave there with that loan as there was a specific time period from when you first went in to meet with him and when closing occured. There were numerous disclosures that were required by Federal Law to be given to you. Thus you knew full well your new loan amount, tern, interest rate, APR etc. Look at your Good Faith Estimate and your Truth-in Lending Statement. Read your signed mortgage and note. Furthermore you had a final chance to think about it and terminate the transaction but you did not.

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We followed his advice and even forced ourselves to add an extra $100 each month onto the principal. When the year was completed, I called to speak with our loan officer and was told that he was no longer with the company. The insinuation was that there was nothing that could be done. After much thought I called again and was given to another gentleman who attempted a refinance. We were, of course, turned down as our house does not appraise for anything near the $165,000(?). As a matter of fact, the assessors office lists the value at $99,000, though a smaller home in the same subdivision recently sold for $121,000.

A: now this appraised value scenario is something that would squash your refinancing. There are specific loan to value ratios that lender's follow.
Specifically and realistically, you have no equity in the property for a refinance.
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We desperately need to lower our payments from the $1734 to something more reasonable.

A: talk to some other mortgage brokers say those that specialize or offer 100% type of financing programs. THere are lenders that offer 105%, 107%+ L/V etc.
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The locked in rate would have brought our payments down some $400-$500 monthly. Is there anything that we can do with this loan?

A: you can't go by a locked in rate because you were never qualified for the loan.

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Also, we found in our research that we have a 15 year loan with a large balloon note to follow. HELP????PLEASE!!!

A: you knew or should have known when you signed, that you got a 15 year mortgage with a balloon payment.