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FREQUENTLY ASKED QUESTIONS

General

  • Who is Back Bay Mortgage Company?
  • Is there an office near me?

Monthly Payment

  • Can my monthly payment amount change?
  • When is my payment considered late?
  • Can I pay extra on my loan?
  • Can you automatically draft my payment?
  • Can I make my payment online?

Escrow Accounts

  • What is escrow?
  • What is escrow analysis?
  • How are surpluses and shortages handled?
  • When will my escrow account be analyzed?

Loan Payoff

  • Is my principal balance the amount needed to pay my loan in full?
  • How do I request a payoff statement?
  • What happens after my loan is paid in full?

Soldiers' and Sailors' Civil Relief Act of 1940

  • What is SSCRA?
  • Who is afforded protection?
  • How is my mortgage loan affected by SSCRA?
  • How will I know if I qualify?
  • Restrictions on Foreclosures
  • What happens when I am released from active duty?

Property Insurance

  • Why do I need insurance on my property?
  • What type of insurance coverage do I need?
  • What is lender-placed insurance?
  • What do I do if my property is damaged?

Mortgage Insurance

  • What is mortgage insurance?
  • Can I cancel my mortgage insurance?

Real Estate Taxes

  • Will you pay my taxes in time to obtain the discount?
  • Can you stop the payment of my real estate taxes if I am going to pay my loan in full?

Assumptions

  • What is an assumption?

ARM Loans

  • What is an ARM loan?
  • How is my interest rate calculated?
  • When will you know my new interest rate?
  • Can I convert my loan to a fixed interest rate?

Delinquent Loans

  • What can I do if I am experiencing problems paying my loan?

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General

Who is Back Bay Mortgage Company?

Back Bay Mortgage is one of the leading home mortgage companies in Rhode Island. We are committed to one thing: helping people realize the dream of home ownership.

For more detailed information about us and our products, visit the Home Loans section of this website.

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Is there an office near me?

Back Bay Mortgage Company has an office in East Greenwich, Rhode Island and Back Bay Mortgage Direct to help you buy your dream house, wherever it may be.

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Monthly Payments

Can my monthly payment amount change?

Yes, your monthly payment amount could change for the following reasons:

Annual Escrow Analysis - At least once a year, we will analyze your escrow account, and adjust the portion of your monthly payment we collect for real estate taxes, insurance, and other escrow items. Your new monthly payment amount shown on the analysis will typically be effective on the anniversary of your first payment due date.

ARM Adjustments - If you have an adjustable rate loan, both the interest rate and principal and interest portion of your payment will change on a regular basis. To determine when your new principal and interest payment will become effective, please refer to your loan agreement. If you have an escrow account, the escrow portion of your payment will change also.

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When is my payment considered late?

The due date of your monthly payment is reflected in your loan documents and on your payment coupons. Your payment should be mailed in time to be received by us on or before your due date. Any payment received more than fifteen days after the due date will be assessed a late charge.

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Can I pay extra on my loan?

Yes. As long as your loan is current, we will apply additional funds to the principal balance of your loan. We can note your intentions once on our system, so you will not need to notify us each time you choose to send an extra payment. Once noted on our system, any extra funds received will automatically be applied to your principal balance. Even if we note your intentions, you are not obligated to send extra principal payments.

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Can you automatically draft my payment?

Yes! We can automatically draft your monthly mortgage payment from the checking or savings account of your choice. You may select any calendar day from the first through the eighth of the month as your draft date. If you wish, we can also deduct a specific additional amount each month to be applied directly to the principal balance of your loan. There is no charge for this service.

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Can I make my payment online?

Yes! With our Online Payment service, you can submit your mortgage payment electronically through our Home Loan Service Center. You may submit an Online Payment any day of the month, and it will be credited to your loan the next business day. When you submit your payment, you may also request we withdraw additional funds to be applied directly to the principal balance of your loan.

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Escrow Accounts

What is escrow?

In addition to the principal and interest portion of your monthly payment, the terms of your loan agreement allow us to collect funds from you for the payment of your real estate taxes, insurance bills, and sometimes other items. These additional funds are referred to as the escrow portion of your payment.

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What is escrow analysis?

Escrow analysis is the process used to determine if the escrow portion of your payment is enough to pay your escrow items (usually tax and insurance bills) for the coming year. The method and format of the analysis is prescribed by federal regulation. The first step in the escrow analysis process is forecasting or estimating the amounts of each of the escrow items we will pay on your behalf in the coming year. Based on these estimates, we then adjust your monthly escrow collection to insure we will have sufficient funds to pay these bills when they become due. We also determine the current escrow balance needed to pay these upcoming bills, and compare this amount with the balance actually in your escrow account at the time of the analysis. Due to changes in the amount of tax and insurance bills, we often discover there is either a surplus or a shortage in your escrow account.

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How are surpluses and shortages handled?

If your escrow analysis reflects a surplus over $50.00, a check for the surplus will be sent to you along with your escrow analysis. If the surplus is less than $50.00, this amount will be divided by twelve and used to reduce your monthly escrow payment.

If your escrow analysis reflects a shortage, we collect the shortage over the next twelve months by adding one-twelfth of the shortage amount to your monthly mortgage payment. If you prefer, you may pay the shortage in full, and we will adjust your monthly payment amount accordingly.

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When will my escrow account be analyzed?

Usually, your escrow account will be analyzed once each year, and your new monthly payment will be effective on the anniversary of your first payment due date. You will receive your Annual Escrow Analysis and a new supply of payment coupons during the month before the effective date of your new payment.

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Loan Payoff

Is my principal balance the amount needed to pay my loan in full?

No. The amount needed to pay your loan in full could also include interest, escrow advances, unpaid late charges, or other fees due on the loan. You must request a payoff statement to determine the exact amount needed to pay your loan in full.

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How do I request a payoff statement?

To request a payoff statement for your loan be mailed or faxed to you, log into the Home Loan Service Center and select the "Statement Center" option, then select "Payoff Statement," or call our office at 1.800.367.6448 and select Option 2 from the Automated Loan Information Line. The statement will provide you with the exact amount needed to pay off your loan by a specific date, and other important information regarding paying your loan in full. Ordering the statement does not obligate you to pay the loan in full.

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What happens after my loan is paid in full?

A check for any remaining balance in your escrow account will be mailed to you or your closing agent usually within ten business days after the date your payoff funds are received. Your release papers will be mailed within 30 days after the date your payoff funds are received, or such shorter time as may be required in some states.

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Soldiers' and Sailors' Civil Relief Act of 1940

What is SSCRA?

The Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA) is a federal statute enacted to financially assist servicemen and women who are called to active duty in the service of our country. In general, this statute serves to suspend or postpone the enforcement of certain civil liabilities of members of our nation's armed forces (including reservists and national guardsmen) who are in active federal service.

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Who is afforded protection?

The SSCRA provides certain relief to the following military personnel (and no others) while in active federal service:

  • all members of the U.S. Army (including all persons in the Army National Guard and Army Reserve), Navy (including all persons in the Fleet Reserve and the Naval Reserve), Marine Corps (including all persons in the Fleet Marine Corps Reserve and Marine Corps Reserve), Air Force (including the Air National Guard and Air Force Reserve) and Coast Guard (including all persons in the Coast Guard Reserve); and

  • all officers of the Public Health Service detailed by proper authority for duty with either the Army or the Navy

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How is my mortgage loan affected by SSCRA?

Qualified active duty military personnel are eligible for a six percent cap on their mortgage loan while on active federal duty - if the mortgage obligation was incurred prior to active duty. To apply for the interest rate cap on your loan, please forward the following:

  • Your written request, including your mortgage loan number.

  • A copy of your orders.

  • The name and telephone number of the person authorized to discuss your mortgage loan.

You may forward the information by mail to Back Bay Mortgage Company, PO Box 711, East Greenwich,RI.

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How will I know if I qualify?

A Back Bay Mortgage Company service representative will respond to you within ten (10) business days after our receipt of your request and a copy of your orders. If you qualify for relief afforded by the SSCRA, a letter reflecting your adjusted monthly mortgage payment amount will be sent to your current mailing address as shown on our records.

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Restrictions on Foreclosures

The SSCRA also provides that in any proceeding commenced during the period of active military service to enforce a mortgage loan arising out of a nonpayment or other breach of the loan terms occurring prior to or during the customer's term of active military service, the court may do the following:

  1. stay the proceedings, as provided in the SSCRA: or

  2. make some other equitable disposition of the case.

The provisions described above apply to loans that are: (1) secured by mortgages, deeds of trust or other security instruments on property owned by a person in military service at the commencement of the period of military service and still so owned by that person, and (2) originated prior to such person's period of military service.

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What happens when I am released from active duty?

Upon release from active duty, your mortgage interest rate will return to the original rate, or current loan rate if the loan is an adjustable rate mortgage.

The above information is intended only as a summary of certain provisions of the SSCRA. If you have specific questions related to SSCRA eligibility or questions during your term of active duty, please call Customer Service Marketing at 1-800-367-6448 or Contact Us online. Back Bay Mortgage Company extends a sincere thank you to those who defend our country.

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Property Insurance

Why do I need insurance on my property?

In order to protect the investment both you and Back Bay Mortgage Company have made in your home, it is required that you maintain adequate insurance coverage on your property at all times. Without this coverage, there may not be funds available to repair your home in the event it is damaged.

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What type of insurance coverage do I need?

We recommend you discuss this matter with your insurance agent to be sure you have the type and amount of coverage which best meets your needs. We require your home be insured for at least dwelling coverage; however, contents coverage is at your option. If your property is located in an area which the government has designated as a special flood hazard area, you may also be required to obtain flood insurance for your property.

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What is lender-placed insurance?

Lender-placed insurance is coverage we order to protect the property when we learn it is not insured. This can occur any time your insurance coverage expires or is canceled, and we do not receive proof of new coverage.

If it is necessary for us to order lender-placed insurance on your property, the premiums for this coverage will be paid from your escrow account. Because these premiums are typically higher than the premiums for insurance coverage obtained from your agent, we encourage you to work with your agent to make sure your property is adequately insured at all times.

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What do I do if my property is damaged?

To file a claim, please contact your insurance company immediately.

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Mortgage Insurance

What is mortgage insurance?

Mortgage insurance protects the lender and investor, or owner of the loan, against loss if the borrower defaults in their repayment of the loan. This type of insurance is typically required on loans where the borrower makes a down payment of less than 20 percent. Without the added protection of mortgage insurance, most lenders would not be willing to make loans to borrowers with small down payments. Any premiums collected for the payment of mortgage insurance on your loan are remitted to the company or agency providing the insurance coverage.

On FHA loans, mortgage insurance is provided by the Federal Housing Administration, an agency within the U.S. Department of Housing and Urban Development.

The mortgage insurance on conventional loans is typically referred to as PMI, or Private Mortgage Insurance. This type of mortgage insurance coverage is provided by private companies.

As stated above, both PMI and FHA Mortgage Insurance protect the investor who owns the loan in the event of a default on the loan. These types of mortgage insurance do not pay off the loan on your behalf if something should happen to you. For information on optional insurance which could pay off your loan or make your monthly payments if something happens to you, please refer to Optional Products.

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Can I cancel my mortgage insurance?

If you have an FHA loan - FHA mortgage insurance protects the investor who owns the loan in the event of default. One reason investors may choose to purchase FHA loans is because of this protection. They know the mortgage agreement is written to allow this insurance to be maintained for the life of the loan, and expect this insurance protection until the loan is paid in full. Therefore, we must continue to collect and remit premiums to FHA as required to maintain this insurance. There may be some circumstances where premiums can be discontinued prior to the maturity of your loan. If you would like more information regarding whether these premiums may be discontinued on your loan, please contact us at 1.800.367.6448.

If you have a conventional loan - The investor who owns your loan determines the specific guidelines for cancellation of the Private Mortgage Insurance, or PMI, and these guidelines may change at any time. PMI must be maintained until you have at least 20 percent equity in your home, and some investors require more equity before PMI can be dropped. If you think you may have 20 percent equity at this time, please contact us at 1.800.367.6448 and we can send you written information outlining the specific cancellation criteria for your loan.

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Real Estate Taxes

Will you pay my taxes in time to obtain the discount?

Yes. If your tax agency offers a discount for taxes paid by a certain date, we will make certain to take advantage of the full discount amount when paying your taxes.

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Can you stop the payment of my real estate taxes if I am going to pay my loan in full?

When you have an escrow account with us for payment of taxes, we are required to pay your taxes until your loan is paid in full. As a result, we cannot accept requests to stop tax payments; we will continue to disburse taxes as usual until we actually receive funds to pay your loan in full.

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Assumptions

An assumption takes place when the buyer of a property accepts responsibility for the repayment of an existing loan, with no change in terms, rather than obtaining a new mortgage. Whether or not a loan can be assumed, and the conditions under which it can be assumed, are outlined in the loan documents. These terms generally fall under one of three categories:

Simple Assumptions - Loans which allow a simple assumption are also referred to as "freely assumable," and this type of loan can be assumed with minimal work and cost. The buyer is allowed to take ownership of the property and begin making the loan payments without providing any information on their credit history or income. Since we do not require any information from the buyer to confirm they have the means to repay the loan, the seller of the property remains liable to us for the repayment of the loan. This means if the buyer who assumed the loan fails to make mortgage payments in accordance with the Note and Mortgage, the seller as well as the buyer may be foreclosed upon, because the seller is still liable for the loan.

If the seller wishes to be released from liability on a loan which is freely assumable, the buyer and seller may request we complete a qualifying assumption. If we give credit approval of the buyer, we will release the seller from liability.

Qualifying Assumptions - On loans which require a qualifying assumption, we must give credit approval of a buyer before they can assume the loan. We review the buyer's credit history and income to confirm they have the ability to repay the loan. If the buyer does qualify, the seller is released from liability on the loan. This means even if the buyer fails to repay the loan, the seller cannot be held responsible.

The process of qualifying for assumption of a loan is very similar to the process of qualifying for a new loan. The credit and financial means of the buyer are evaluated by us. This takes more time and effort on our part and the buyer's part, so the fee for a qualified assumption is higher than the fee for a simple assumption. However, the fee may still be lower than the cost of obtaining a new loan. On loans which require a qualified assumption, if an interest in the property is transferred to a buyer whose credit we have not approved, we have the right to require that the loan be immediately paid in full, or we may foreclose on the property.

Due on Sale - Some loans do not allow assumption by another party, and are referred to as due on sale. If your loan contains a due on sale provision, the loan must be paid in full if your property is transferred in violation of the loan documents.

If you are selling your property and have questions on the assumability of your loan, please contact us at 1.800.367.6448.

If you will need financing on the purchase of a new home, as an appreciation incentive to existing customers, we are offering a coupon good for $250 off the closing costs of your next loan with us. Please call 1.800.962.3350 to learn more!

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ARM Loans

What is an ARM loan?

ARM stands for Adjustable Rate Mortgage. With an ARM loan, the interest rate and the monthly principal and interest payment change (adjust) periodically. The timing, frequency, and methodology of the adjustments are outlined in the loan documents.

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How is my interest rate calculated?

The initial interest rate on your loan was determined by the competitive market of rates in the mortgage lending industry for your particular ARM product at the time your loan was originated.

Beginning with your first adjustment, the new interest rate on your loan is calculated according to the formula in your loan agreement. This rate is typically determined by taking the index specified in your loan documents (such as the One-Year Treasury Index), and adding it to a fixed percentage, called the margin. This figure may then be rounded, and is often subject to rate caps, which limit how much your interest rate may change at any given adjustment, or over the life of the loan.

Please refer to your loan documents for specific information on the index, margin, and rate caps which apply to your loan.

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When will you know my new interest rate?

If you have an FHA or VA ARM loan, we will mail you a letter showing your new interest rate approximately six weeks before your new payment amount is due.

If you have a conventional ARM loan, we will mail you a letter showing your new interest rate approximately eight weeks before your new payment amount is due.

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Can I convert my loan to a fixed interest rate?

Some ARM loans give you the option of converting your loan from an ARM to a fixed rate loan. This opportunity is usually only available for a limited period of time. If the loan is not converted to a fixed rate during this time period, the interest rate will continue to adjust for the life of the loan.

Please refer to your loan agreement to determine whether or not your loan contains a conversion option. If it does, the loan documents will specify when this option is available, and how the conversion rate is calculated.

If you choose to convert to a fixed interest rate, the conversion rate may be higher than your adjustable rate, and slightly higher than the current market rate for new fixed rate loans. However, the cost to convert your ARM to a fixed rate loan is usually substantially lower than the cost of refinancing.

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Delinquent Loans

What can I do if I am experiencing problems paying my loan?

If you are experiencing difficulty making your mortgage payments, please phone our office at 1.800.962.4450 immediately. Our experienced staff handles situations like this daily, and they can offer options that are available to you to help you through this difficult time. Depending on the reason for the delinquency, your future financial outlook, and the type of mortgage you have, some or all of the following options may be available to you.

Repayment Plans - These are verbal agreements allowing you to make a full payment and late charge plus a portion of another payment each month until you bring your loan current. These plans typically last no longer than four months. For example, if you are unable to make your payment this month, you may be allowed to establish a repayment plan where you would make one and one-half payments (plus late charge) next month and the following month to bring your loan current.

Forbearance Plans - These are written agreements which may call for a short period of reduced or suspended payments followed by a period of regular and increased payments. Detailed financial information and proof of hardship caused by circumstances beyond your control will be required for this option to be considered and may not be available on all mortgage types.

Modification - This is an actual changing of one or more of your loan terms; for example, the term of the loan or the interest rate. Detailed financial information and proof of hardship caused by circumstances beyond your control will be required for this option to be considered and may not be available on all mortgage types.

Pre Foreclosure Sale - It is also called a "short payoff." If you have a financial hardship, you may be allowed to sell your home for a fair market value even if the proceeds of the sale will not be sufficient to pay the loan in full. The shortage may be absorbed by us, the mortgage insurer, the investor or you may be required to pay some or all of the shortage over time. Detailed financial information and proof of hardship caused by circumstances beyond your control will be required for this option to be considered and may not be available on all mortgage types.

Deed-in-lieu of Foreclosure - It is also called a "voluntary conveyance." If you have a financial hardship and you have made a good faith effort to sell your home but have been unable to, you may be allowed to deed your property to us, the mortgage insurer or the investor. Detailed financial information and proof of hardship caused by circumstances beyond your control will be required for this option to be considered and may not be available on all mortgage types.

Regardless of the reason you may be having difficulty making payments, the most important action you can take is to call our office immediately at 1.800.962.4450.

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These responses to FAQs are a brief summary of some of the key points. These responses are subject to change without notice.

 

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