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.
It's Always Something . . . . Roseanna Roseannadanna