How to Calculate Payoff and Arrears on Non-Performing Note

[Eric Jones]

Hello,

I'm currently doing due diligence on a non-performing junior lien that has gone unpaid for about 5 years. I know the unpaid principal balance, interest rate, and monthly payment but the arrearages and payoff amount have not been provided... So I'm trying to calculate them. Here are the numbers:

Original Balance = $73,200

UPB = $64,000

Payoff Amount = ?

Arrearages = ?

Rate = 13.75%

Monthly PMT = $867.18

Late Fee = 2% of "overdue payment of principal + interest" <== Does this mean 2% of $867.18 is the monthly late fee?

Also, does negative amortization occur when the loan isn't being paid? If so, I'm thinking it would look something like this:

UPB @ last payment = $64,000

Payoff after first missed payment = $64,000 UPB + ($64,000 * 13.75%/12) Interest + $17.34 Late Fee = $64,751?

Or is there no negative amortization and your new payoff is just the UPB + late fees?

Is this the correct way to think about/calculate late fees, arrearages, and payoff amount?

Thanks in advance!