Profile picture for macmrc

Balance Forgiven?

When a loan is refinanced and the the payoff balance (Appraisal amount) given to the Broker is less than the original amount owed and the Broker was originally told the balance was forgiven can the original Bank force you you to take a signiture loan for the unpaid balance after closing.

  • June 16 2010 - Midvale Park
  • 0Yes

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Answers (2)

Best Answer

Wow this is a "short pay" and I have not seen one of these for years. Yes they can require the remaining balance be in the form of a note loan.

I am curious about 1 thing though. Have they released their lien on your home yet? You can find out by contacting the county recorder and asking them if a lien release or satisfaction was filed.

You may also want to get in touch with the broker and the settlement agent. The settlement agent should have a payoff letter from the lender on file and that payoff letter would likely disclose the terms of the short pay. It would have language stating the remaining balance would be forgiven if that is the truth.
  • June 16 2010
  • 0Yes

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Profile picture for wetdawgs
Do you have paper documentation from the bank that the balance was forgiven or was it only verbal?    Rarely is a balance forgiven with a refinance. 

  • June 16 2010
  • 0Yes

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