Paying off Citimortgage HARP mortgage problems

[SheilaM883193]

 In 2013 my husband and I qualified for the HARP loan modification through Citimortgage. $156,000 was deferred until 2036, while we started paying on $76,000 monthly until then. The following year, our state's "Hardest Hit Fund" applied $50,000 to that $76,000, and in 2016, Citimortgage applied another $5,000 for "good behavior" in paying on our loan. Therefore, this first loan of $76,000 will be paid off early.

Fast forward to today: May 1 was to be our final loan payment on the $76,000. Our contract with Citimortgage says, "$156,000 shall be deferred and I will not pay interest or make monthly payments on this amount." Today I was speaking with a Citimortgage MANAGER no less, and first she told me she never heard of HARP and that Citimortgage never had any such program, even though Citimortgage's logo is on everything and signed by them. She said we must continue making monthly payments even though the first mortgage will be paid in a couple of weeks or we must order a Payoff, which will trigger our Balloon Payment of $156,000 will be due immediately in one lump sum.

Advice as to what can be done?

Thank you.

[GailL1]

Get out your loan documents and read over them.

These are the things that you should pay special attention to -

1.  Is there a prepayment penalty for paying off the $ 76,000 early? 

2.  What does your loan docs say about what happens when you pay off the $ 76,000?

3.  What was the original length of the $ 76,000 mortgage?

4.  Was the $ 156,000 a forebearance amount?  And what do the loan documents say about how it can be repaid and when.

This webpage will explain many details.

The Difference Between Principal Forbearance and Principal Forgiveness

It does not sound like you have Principal FORGIVENESS, therefore the $ 156,000 has to be paid.

Usually, a borrower would have to refinance this forebearance amount because it does come as a "ballon payment" - that or they sell the house and pay it off.

You said . . . . Our contract with Citimortgage says, "$156,000 shall be deferred and I will not pay interest or make monthly payments on this amount." 

Yes, that is the way it works UNITIL the main amount is paid off ( the $ 76,000) - then the borrower is responsible for paying the forbearance amount - either all at once with their own cash OR refinance the amount with the same or a different institution since hopefully you do have some equity OR sell it and pay it off.

I guess some institutions may have set the conclusion to this forebearance amount in your loan documents; giving interest rate and term but this should also be covered in your loan documents.