Home loan advice needed

[tyedyeto]

Background:

A friend of mine has paid off a second mortgage and the loan now shows a ZERO balance. Monthly bills keep coming showing that zero balance. So, a phone call was made to the lender to ask why the bill kept coming in the mail when nothing was owed. My friend was told to pay the lender $350 in order to release the loan or the loan would be considered active until the $350 is paid.

Questions: Is this common practice? Is it legal?

[Taxloss]

1. Yes, it's legal and common practice. n/t

[Missy M]

2. Yes, that is what we had to do.

[demnan]

5. Wow! really?

The motherfuckers will do anything to keep you paying money, won't they?

[demnan]

3. But, but

if he pays $350 on a zero balance, won't the system just automatically refund him the $350?

I'd call again. Sometimes these mortgage companies have morons answering their phones.

Congratulations to your friend, by the way.

[tyedyeto]

7. My friend did get a moron on the phone.

When asked where in the contract it was, she couldn't find it. Like I told the other kind poster, right now he is traveling and doesn't have access to his contract. I'm sure the contract will be looked at when he returns.

Thanks for the advice.

[Kolesar]

4. "Second mortgages" cannot be closed within 3 years without a penalty

Such is typical terms. If he can just wait until three years from inception has passed, then close it, he would be Ok. I hope your friend does not have to sell the house before then.

edit: such details should be in the contract.

[tyedyeto]

6. My friend hasn't checked the contract yet

since he is traveling on business. I'm sure he will when he returns. All this has been done by phone. The loan was taken out about 2 years ago so that puts it under the 3 years.

Thanks for the info.

[Kolesar]

8. I had to deal with this problem before

Good luck to him!