In year 2 the penalty would decline to 4% of the current outstanding balance and so and so on.Here is a summary of your current terms: Universal Bank Terms Loan Amount: $1,928,010 Loan Term: 30 Years 5 Year Fixed Rate (as of today): 3.83% Amortization: 30 Years Monthly Payment $9,539 Margin: 2.50% over 6 Mth.

For all ARM loans, any payment to principle reduces the outstanding balance and when the arm adjustment occurs, the scheduled payment usually decreases (assuming no interest rate change). 

That does not give you the right to go to the bank and get the outstanding balance. 

I got an email from a friend of mine yesterday, he told me he got a loan from a local bank (which is damn near impossible to do these days) on a property a month after he purchased it!

Don't be like them, for your own sake.I'd like to say I give everyone a chance, but the reality is that I've spent so much time training and retraining these bird dogs (and most of them never do a damn thing) over the last couple of years, I am very hesitant to even begin working with new ones.

I agree, if there is no green card due to violations there a pretty good chance there are some outstanding fines - and trust me they don't go away.

A lender will do a short sale when the Value of the house is Less than the outstanding balance. 

So the mortgage payments are structured in a way where the mortgage would (theoretically) be paid off in 20 years, but in reality, the bank will want the outstanding principal balance paid off on the 60th payment (year 5).

The 2% rule works for a very limited range of rents ~ $500 give or take; of course, if your rent is higher and you get 2% of purchase price, that's outstanding.

In the continued repetition and improvement of your systems efficiency and the increase of your cashflow you will achieve the decamillionaire status, and we'll be smoking cigars at Mark's and you'll casually mention, "Oh by the way, my banker tells me I'm a decamillionaire today....doesn't help me one bit with those damn vacancies though."