Legal Question in Real Estate Law in Ohio

Husband lost job last year, took a few weeks to find a decent paying one. Applied for Making Homes Affordable & was denied, bank put us on a forebearance plan for 3 months to verify income, then they wanted us to try the MHA program again. That was Jan. 2010, they just denied us again. House immediately went to foreclosure. We have been working with the bank since day 1. Bank has worked out a loan modification for us. It requires adding back interest & fees into our current mortgage & lowering our interest rate from 6.75% to 4.375% and extending the loan to 40 years. We have the option of accepting the modification or paying $20,000+ up front to get our mortgage current. In our mortgage contract it states you owe unpaid interest in a case of defualt on the loan. My question is we owe $20,000+ in interest and fees, is there anyway to get around that or are we stuck paying the full amount? We have to sign papers tomorrow.


Asked on 5/26/10, 9:39 am

1 Answer from Attorneys
Harold Paddock Harold Paddock Co. LPA

Short answer: probably no way around it. The interest just has been piling up and unless they waive it, you will likely have to pay it. Suggestion: try to reach a HUD certified housing counselor in your area to review the papers. These counselors work for free and help people with just this type of situation. Your proposed deal does not sound unusual, and you do get a lower interest rate and a longer time to pay. The key is--what is the monthly payment? If you can afford it, and it is lower than what you pay now, the deal is worth serious consideration. You can also get advice and information at http://savethedream.ohio.gov/ Best of luck.

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Answered on 5/26/10, 12:55 pm


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