Jan
20
Can a mortgage lender add to the principal balance during a modification?
Filed Under Personal Finance
christine asked:
I recently modified my mortgage and my lender added an additional $5,000 to the principal balance. When I asked about this, I was told that they were legal fees however I paid legal fees for 4 months during the “pre mod stage” because my home was in foreclosure. My payments are lower but I am concerned about the additional balance that was added. I pulled my credit report and it indicates my balance on a $124,000 loan is $129,000 which most like has affected my credit. So my debt to income is worse now than what it was before.
Arnita
I recently modified my mortgage and my lender added an additional $5,000 to the principal balance. When I asked about this, I was told that they were legal fees however I paid legal fees for 4 months during the “pre mod stage” because my home was in foreclosure. My payments are lower but I am concerned about the additional balance that was added. I pulled my credit report and it indicates my balance on a $124,000 loan is $129,000 which most like has affected my credit. So my debt to income is worse now than what it was before.
Arnita
Comments
One Response to “Can a mortgage lender add to the principal balance during a modification?”
Tyra
There were fees involved with doing the remodification (a form of refinancing). Since these weren’t part of the interest, the only place they go could–since you didn’t have the cash–was on the balance.