Question about ballon mortgage

I have a balloon mortgage due soon on my home. I was not aware until about 6 months ago that I had this. I refinanced 15 years ago with a mortgage company that has long gone out of business and this loan was sold to another bank. I have lived here 20 years. I asked the bank for a copy of my mortgage contract and they sent me a contract that had no 15 year or 30 year loan, just a due date. Yes, I signed but back then I did not realize about since the mortgage person had never told me. I feel that I was taken of advantage of. I think this was predatory loan. What can I do? I want to continue to keep my house but the bank does not want to refinance with me as the house balance is not what the home is appraised at; 20 years ago it appraised at $89,900 but it now appraises for $65,000. The balance is due next month is $68,000. I have never been late; my payments were always paid on time.

Asked on November 5, 2017 under Real Estate Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You almost certainly have no recourse, unfortunately.
First, if you refinanced 15 years ago, it would be too late to bring a claim based on fraud (on being lied or misrepresented to about the loan): the statute of limitations (or time within which a claim must be brought) for fraud is only 6 years in your state, so you would be out of time--it is too late to file or start a lawsuit.
Second, the mortgage person does not have to "tell you" about the balloon payment or other terms of the loan so long as they are in the mortgage paperwork itself. The law requires people to read what they sign before they sign it; if you signed the mortgage paperwork, you are legally presumed to have read, understood, and agreed to what was in the document. Therefore, if the terms of the loan were laid out in the agreement, you are legally held to them, because you were supposed to read them prior to signing; you're not allowed to just rely on what the mortgage person tells you when the terms are right there in front of you in text.

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