Prepayment penalty

[amaze]

What is the name of your state?What is the name of your state? Illinois.
I refinanced my mortgage with New Century Mortgage Corporation of Irvine, CA in December of 2002. The documents I have states that I have PPP if I prepay the balance in full within 2 years of the execution of the security instrument. When I called them to verify this recently (August 11,2004) I was told that my mortgage account does not have a prepayment penalty because I live in Illinois. I told them that their documents says otherwise but
they insisted that I have no PPP. I faxed them a copy of the document and I am waiting for their response which they say will take 3 to 5 days. Will you please shed light on my situation.

 

[HomeGuru]

What is the name of your state?What is the name of your state? Illinois.
I refinanced my mortgage with New Century Mortgage Corporation of Irvine, CA in December of 2002. The documents I have states that I have PPP if I prepay the balance in full within 2 years of the execution of the security instrument. When I called them to verify this recently (August 11,2004) I was told that my mortgage account does not have a prepayment penalty because I live in Illinois. I told them that their documents says otherwise but
they insisted that I have no PPP. I faxed them a copy of the document and I am waiting for their response which they say will take 3 to 5 days. Will you please shed light on my situation.

**A: if your state, by law restricts a prepay penalty, then the mortgage company may be correct. Contact your Illinois mortgage brokers association or attorney general's office to inquire.

 

[BriantheBanker]

correction

First off, Why would you fight them saying you don't have a ppp??????
STOP fighting.
second, because NC is a Federally Chartered Bank, they may not follow the state ppp guidelines. (this topic is being actively argued in the industry.)

confussed,

BriantheBanker

 

[MortgageGuru]

Or you could just order a payoff and see if it is there. If not then no worries. If it is then float your interest rate a little while and then lock when solid signs of rate hikes begin to appear.

 

[BriantheBanker]

payoff is a good idea

Yes, if you are loosing sleep over the ppp; a payoff will show a ppp or not.
Believe it or not, some of these companies do not know what the actual terms of your loan are. Because of the enormous amount of paperwork, servicing centers (where you call for account info, etc...) are not always aware of pre-pays because the payoff department is seperate. There are companies that require weeks to prepare written payoffs in order to research fees including applicable pre-pay penalties.
Is there a reason you are so concerned with a ppp? are you thinking of selling?
If you sell, (and have a ppp) the ppp may be soft. (don't have to pay ppp if the house is sold.)
Another reason info may not be available could be if you have recently closed on this loan, information is not yet available. if you did just close, relax.
(since New Century transfers 85-100% of their servicing, I am guessing you just closed.)

Get something in writing indicating no pre-pay if you are concerned.

Good luck,

BriantheBanker