Mortgage payoff mix-up!?

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I will try to make this short: We have 3 properties on one loan. They are all rental properties. I am a little confused…I asked our commercial lending bank to e-mail me information as to the amount I would need to pay each property off separately. I was e-mailed back with 3 separate pay-offs for the three separate properties totaling $ 119,567. Breakdown of payoffs: West 23rd Street $ 36,167, West 21st Street $ 41,277 and Cherry Street $ 41,277. We put all of them up for sale a little above the payoffs I was given in the e-mail. The West 23rd Street sold for $ 37,000, we called the bank to confirm the payoff amount, agreed with the contract, and closed. Then I receive a new mortgage amount in the mail for my new payment book, with the remaining two properties on it, and they totaled $ 109,000. But, I should only have a $ 81,721 balance right?? Now the wind up is that we sold Cherry Street (it closes at the end of September) for $ 45,000, but according to their calculations, the price we agreed on with the buyer, is not enough to pay their new estimated $ 54,618 balance on that property. We have to bring cash to closing to sell it, over $ 10,000 with all of the closing costs. The bank says they are sorry that their e-mail was confusing to me, but they said that there is nothing they can do to help me…it is what it is. This is the way the wording was on their original e-mail; “The current payoff is $ 150,047. Based on the original appraisals of $ 71,000 for West 23rd, and $ 78,000 for West 21st and the Cherry street property, and a loan to value ratio of 73%, the monies needed to release each property individually would be as follows: West 23rd $ 36,167, West 21st $ 41,277, Cherry Street $ 41,277.” Do I need to contact an Attorney, or did the bank make it clear enough for any of you? If so, I must be really stupid! Please help!! I feel that I was mislead, and now I have to pay for it. By the way, our Realtor said that an offer came in for our West 21st Street property at $ 45,000, but now I can’t accept it knowing what I know about the new payoff amounts. SORRY this is so long!

1 Comment
  1. Reply
    MM C
    May 1, 2011 at 4:52 am

    Don’t accept the offer if it does not cover your payoff amount. You should sell your properties at market price instead of your payoff price. It never happened to me before so I don’t really know who’s fault to this but as an owner you must have an idea of how much of the loan balance is. I think the best way is to ask your lender send out a statement of the loan balance on each of your property. (not email not verbal) The payoff amount usually is just the balance plus the interest incurred to the day you pay it off and the title company will find out the exact amount right before closing.

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