Please help me sell my home!

April 30, 2008 9:01 AM

My mortgage payments are overdue and I have filed paperwork for a loan modification. I just accepted an offer on the condo, and it is due to close on June 26. What is the best way to get clear with the mortgage company before closing?

I am in Minnesota, have owned the property for two years. I have two mortgages on the condo and had trouble paying--so they did a modification, and told me to focus on paying that instead of my much smaller mortgage.

Now that is in trouble, but they are reviewing it. I need everything to be free and clear so it can sell. I currently owe Aurora Loan Services $1,600 and will have that amount by June 26. What should I do?

Will they allow me to pay it all off at once in June? Can I pay half now and half later? I want to know what rules I am up against before I call them to figure this out. Thanks so much for the advice--it will be a relief to get out from under payments on the mortgage.

posted by hamster to work & money (5 comments total)

Have you called Aurora to find out? I'm going to guess they'll want you to pay now.

The mortgage section of creditboards.com could be very helpful to you, I think.
posted by jerseygirl at 9:22 AM on April 30, 2008

Better read your mortgage language, too. Or ask them when you call. (I'm pretty sure they have to inform you of their interpretation of the instrument itself.) Some have advance or early "prepayment penalties."
posted by resurrexit at 10:08 AM on April 30, 2008

They should allow you to pay it off in June, even if you're behind.

Two caveats:

1. Mortgage financing programs are in a constant state of flux. What this means to you is that your prospective buyer's financing may fall through or get delayed. This is a very real possibility.

2. Read the modification paperwork. If you save your money rather than catching up the mortgage in anticipation of selling the condo in June, what repercussions are there from Aurora? Do they start foreclosure proceedings? If so, you credit will suffer greatly AND fees will be added to the balance of the loan which could mean your bringing money to the table at closing, or at the very least, making less money on the sale.

Language on your original mortgage ppwk will more than likely be trumped by the mod ppwk so look it over carefully.
posted by curlyelk at 12:19 PM on April 30, 2008

Thanks for the advice so far, guys. I called Aurora, who claim they did not receive my mod paperwork (this is #$*&, as I have the fax confirmation, arrgh). I was able to bring one mortgage fully current--but it took some negotiating--and will bring the other current next month. This should ensure that everything is kosher by my closing date.
posted by hamster at 12:38 PM on April 30, 2008

Good news. Best of luck to you.
posted by curlyelk at 12:42 PM on April 30, 2008