CalVet First Lien Bank of America Secon Lien - Mortgage Assistance Options

[VictoriaJo]

After much research into each and every government program it appears we fall through the cracks on a second lien modification under government guidelines ....

.... which of course means the B of A assistance proposal is to INCREASE our monthly payment by $60 under what appears is the same loan term we have now of 2.49 percent variable -- however they won't disclose actual terms for 90 days.

We are not delinquent but at imminent risk of default and underwater once the second is added to Loan To Value.

Is anyone aware of any guidelines that hold B of A accountable to their fiduciary duty to act in the best interest of the customer also?

Thanks in advance - Victoria

[TomEason]

VictoriaJo

Thanks for your post and welcome to Loansafe.

Since your BOA 2nd is underwater, they won't FC. I recommend you never again make payments on that loan and strive to eventually settle that debt. FYI, a settlement is almost always a better deal for the debtor than a mod.

I recommend you visit the following thread and follow the guide at post #1. Good luck to you.

Strategy for Settling Your 2nd

[VictoriaJo]

Thank you for your reply. After much thought, we agree settlement is the best option and will use the strategy as our guideline.

My husband is a disabled veteran and I was forced to quit my job to manage his care. We are on a fixed income and financially insolvent. Our debt-to-income ratio on the first mortgage is 40 percent. After the first lien we have $50K equity. I understand foreclosure on average can cost a lender $50K and in addition distressed sales average lower than full market value sales by 20 percent (and higher) -- a $65K adjustment in the event of a foreclosure.

Tom, can I ask for your thoughts on a settlement percentage in light of our situation? As an FYI, the second lien is $250K. I am prepared to wait as long as necessary for a good settlement and they can foreclose if they want. Thanks in advance.

[TomEason]

Hi VictoriaJo

Thanks for your post.

Your computations are close. In my experience, generally a FCing lender's cost of FCing and reselling the REO property averages about $50K; that includes the discounted distressed sales price.

As far as settling your 2nd, your situation is routine. Again, your 2nd is underwater and won't FC. I recommend you follow the guide. Good luck.