Listen. I know math was torturous for most people growing up. I was not that person. I loved math. Absolutely adored it. It was my undergrad major before I changed it. Long story. Some other day. Most people will confess to hating math and never believing they would use any of what they learned in real life. While I could argue against that for days, it is not the point tonight. Today, we’re gonna just talk about addition and subtraction.
In my line of work, I deal with people who are experiencing difficulty paying their mortgages. Some borrowers have missed a payment here or there. Some of the borrowers haven’t made mortgage payments in years… like 4 or 5 years. In order to avoid foreclosure, borrowers reach out for assistance. Most are looking for modifications.
A modification adjusts the terms of the original mortgage. The main goal of modification is to bring a loan current. Not to reduce the payment. Not to reduce the interest rate. Just to bring the loan current. I see accounts where borrowers haven’t paid for 4 or 5 years. 48 to 60 months of not paying a mortgage can really add up. When these customers are approved for modifications, the first thing they do is complain about how the payment didn’t reduce and why their principal balance increased. They bust out the abacus, start running tapes, and use their iPhone to add up what they think the amounts should be.
That’s cute. But where was your abacus, tape machine, or iPhone 4 years ago when you stopped making mortgage payments? Did you calculate how much you weren’t paying to live in your home for the last 48 months? Do you know the total amount of money you should have saved since you didn’t pay your mortgage? Did you calculate that? Do you have records of that? No? I didn’t think so. Since you didn’t subtract the amount of your mortgage from your bank account each month, the delinquent interest, delinquent escrow, and fees due began to add up. It’s quite simple.
Today, I listened to two different borrowers try and dispute the amounts of delinquent interest, delinquent escrow, fees due, and unpaid principal. It was saddening and hilarious at the same time. It was sooooo hard to refrain from asking them, what exactly did you think was going to happen with your past due amounts? Did you think they were gonna magically disappear? Did you think they weren’t ever going to become due?
See, the way your mortgage is set up…