TheNewSaint wrote:I wonder what "paperwork" Amanda thinks she saw that prove Tom paid the mortgage. And, why they spent so much court time on warrants and wet ink seals and other rubbish, when they had documentation that would have easily settled the matter if true.
She may have seen a statement that showed the total interest paid over the life of the loan. IIRC, they claimed at one point to have paid the loan three times over. That is entirely possible with an interest-only loan. That doesn't mean that the loan was paid, however.
I don't know if she is really that stupid, that she doesn't understand what the term "interest-only" means. Maybe she is. From the descriptions I've seen here of the endowment mortgage, it seems like a poor loan product, from the start. Unless the endowment had a guaranteed interest rate that was sufficient to accrue enough capital to repay the loan, there was always a high risk of a significant shortfall when the note came due.
Here in Ohio, back in 1981, I took out a similarly bad loan. It was a negative-amortization loan. Interest rates were so high (up to 17 percent) that few people could afford a mortgage. These loans were written with a very high interest rate but with a payment that was less than the monthly interest. So, every month, you added a little bit more to your loan. The theory was that, over time, the borrower would receive salary increases and could begin paying the full payment. I think I was required to begin full payments within five years.
Fortunately, interest rates came down within a couple of years, and I was able to refinance at a more reasonable rate of (IIRC) 11 percent, fixed rate, conventional mortgage. I was able to afford the payment on that loan. After a few more years, I was able to refinance again, to an even lower rate.
Question: Was the endowment portion of those loans a life insurance policy? IOW, if the borrower died, say, five years into the loan, would the endowment have paid the entire principle balance?
Also, IIRC, Tom got his loan in 1988. Surely interest rates have come down since then. It would seem that he could have refinanced to a conventional repayment loan, at a lower interest rate. He might have been able to get a repayment loan with a monthly payment amount less than he was paying B & B for an interest-only loan.