I am owner financing a mortgage (wrap around) and the people are late on their house payments. I understand how to figure the amortization schedule by hand for a mortgage that is paid on time, but how do you figure out the interest for the late payments? To make matters a little more complicated, they did not pay Sept-December 2002 mortgage payments and filed chapter 13 bankruptcy in December. The payments that they made after the bankruptcy were credited to their Jan-May 03 payments (June and July payments have not been made yet) due to the past due mortgage being in bankruptcy. How do I figure out the interest amount to add on the Sept-December 02 payments? Their bankruptcy has been dismissed for non-payment and I am going to attempt to foreclose (if they do not file chapter 13 AGAIN - for the 3rd time) Thanks for the help!!
You figure the interest on a late payment exactly the same way you would for an on-time payment, BUT be aware there may be negative amortization (the payment is less than the interest) That will INCREASE the balance for the next payment.
Since she filed bankruptcy in the middle (which is now dismissed) , is she still accruing interest on the payment from last september that has not being made, even though she made the January payment? Thanks!
