DOJ Modification - California

**kentu_tiro** · 08-12-2012, 12:04 PM

So after 2 years of waiting for BofA to foreclose the property, I decided to give it 1 more shot. I received a letter recently from BofA offering a modification that may include principal reduction. Over the last 2 years we've tried to get a modification and also we tried to short sell it twice to no avail. I called the number on the letter and mentioned that I am eligible for the DOJ modification. So just this last week I came in with the completed forms and paperworks to have this thing going.

I bought the house for $450K in 2005 and now I have about $70K in deficiency. The councilor told me that the house is now only worth $260K and should I get an approval for the DOJ modification, my new principal will be $260K. I'm like WHAT??? As it was explained they will need to knock off $260K from the $450K bringing the principal down to $190K. Then the $70K deficiency I owe gets added back to the principal for a total of $260K. I also understand that if I get an approval, the new payments will include principal and interest + impounded property tax.

I am really skeptical as obviously this sounds too good to be true. We will see in at least 10 days if this gets approved or not. If it does get approved then that's the only way I see it worthwhile to go back. If not then oh well I tried. Could this be really true? Keeping my fingers crossed....

**Evan Bedard** · 08-13-2012, 07:32 AM

I bought the house for $450K in 2005 and now I have about $70K in deficiency. The councilor told me that the house is now only worth $260K and should I get an approval for the DOJ modification, my new principal will be $260K. I'm like WHAT??? As it was explained they will need to knock off $260K from the $450K bringing the principal down to $190K. Then the $70K deficiency I owe gets added back to the principal for a total of $260K. I also understand that if I get an approval, the new payments will include principal and interest + impounded property tax.

That is great news you were sent a letter stating you are eligible for the DOJ settlement! this is definitely legitimate and we have many other members here who have inquired about the program. Here are a couple links you may want to check out in regards to the settlement..

National Mortgage Settlement

Modification, Refinance, and Short Sale Program Enhancements | Bank of America

**kentu_tiro** · 08-16-2012, 02:14 PM

thanks evan! ok so today i did get an approval on the principal reduction. but i'll be paying more that before i went under!

was paying $2100 interest only before. now it will be $2500 with principal & interest + impound. the principal is indeed being reduced from 450k to 260k but it seems they jacked up the interest rate to make sure they recoup whatever principal they are forgiving. i asked the councilor for a breakdown of the new $2500 payments and i find it odd that he said he can't provide it since i will be starting with a trial payment first for 3 months. really disappointed right now....

**Evan Bedard** · 08-16-2012, 02:58 PM

was paying $2100 interest only before. now it will be $2500 with principal & interest + impound. the principal is indeed being reduced from 450k to 260k but it seems they jacked up the interest rate to make sure they recoup whatever principal they are forgiving. i asked the councilor for a breakdown of the new $2500 payments and i find it odd that he said he can't provide it since i will be starting with a trial payment first for 3 months. really disappointed right now....

That is strange your payment is increasing a few hundred dollars since they are reducing the principle such a drastic amount. What interest rate you were paying before you feel behind on payments?

**kentu_tiro** · 08-16-2012, 03:29 PM

i think i was at 6.5 percent interest only before i stopped paying. in trying to come up with the #s it seems the new rate is around 8 percent which is double than the current rate in the market for 30 yrs fixed. i'm leaning towards rejecting it and letting bofa just foreclose it. it doesn't make sense to pay $400 more after a $190k principal reduction. they are pretty much conning me with a reduced principal balance but double the interest rate. shame on bofa.

**Evan Bedard** · 08-17-2012, 07:40 AM

You may want to try contacting the executive's office to see if they can explain why your payment is increasing so much after such a significant decrease in loan amount. Also the following thread has many other members here who received their letter for a principle reduction/modification under the national mortgage settlement..

BofA executive team
1-704-386-5687

Letter from Bank of America about the U.S Department of Justice and State Attorneys Settlement

**kentu_tiro** · 08-17-2012, 01:42 PM

thanks evan! will call them and try to ask for an explanation.

1 thing i'm thinking is in the form i submitted to them i had put $500 as my monthly property tax (which is what i was saving per month before i stopped paying). then i also put in $1500 per year on the hazard insurance which comes down to $125 per month. and it does state in the letter that the payment contains the principal + interest and the escrow (prop tax) + insurance. so that could be another thing they did. if true, then i can see my escrow account having excess funds which usually is given back anyway during regular reviews of the escrow account.

**kentu_tiro** · 08-17-2012, 02:27 PM

so i called the executive team and spoke to an advocate. all he did was basically transfer me back to the manager of the financial councilor i was working with. and the manager really couldn't explain how the trial payment was calculated either. she said "they dont disclose it to us". then she goes on to say that at the conclusion of your trial payments you will get your final modification documents which will detail the payments how it's amortized etc etc.

**sac42375** · 08-19-2012, 06:12 PM

Kentu_tiro: Do you think your payment could be a percentage of your gross monthly income? Maybe 30% or 25%. We too received a principal reduction and think ours was calculated from our gross monthly income.

**kentu_tiro** · 08-19-2012, 09:26 PM

Originally Posted by sac42375

Kentu_tiro: Do you think your payment could be a percentage of your gross monthly income? Maybe 30% or 25%. We too received a principal reduction and think ours was calculated from our gross monthly income.

i really have no idea how they got the new payment. the only consolation there is that the new payment includes principal and interest along with escrow for property tax and insurance.

**Evan Bedard** · 08-20-2012, 07:14 AM

Sac makes a good point about the payment being based off gross income, what percentage is $2,500 of your gross monthly income?

**kentu_tiro** · 08-27-2012, 01:24 PM

Hi! I guess the proposed payment does come close to 25% of my gross and the extra is for the property tax and insurance. My only other concern is this. The 3 month trial payment starts in October 1st and the last payment in the trial period ends in December 1st. After that only then will I get the final loan modification documents etc which would be like January 2013. But there is a tax law that ends in 12/31/2012 for the cancellation of debt income. Can anyone help me understand if I will be at risk or not? Would really hurt if after all this I get slapped with a huge tax penalty for CODI.

**kentu_tiro** · 08-27-2012, 02:28 PM

Will Mortgage Forgiveness Debt Relief Act Be Extended?

There is a chance that the act will be extended till 2015 based on Obama's FY2013 budget proposal. Let's hope it doesn't get used for politics.

**bizbycherry** · 08-28-2012, 03:50 PM

Hi. I am trying to understand how BofA calculated your mortgage payments (impounded). If you are saying that the bank calculates the monthly escrowed payment by 25%, then most people are declaring income of about how much for the bank to come up with $2,500 a month? I am new to this forum and need help. Just recently divorced and took me two years to get the ex out of the house. We were married 11.5 years, together 16 years. After giving up spousal and child support (we have two boys, 11 and 7), and him leaving me with $70K worth of debt, half of which I could claim in bankruptcy, the house is the only "asset" that I have left in my name.

Last August 21st, I was declined by BofA for a loan mod due to the bank not able to verify my identity. It was upsetting to be declined after almost three months of going back and forth with the rep here in San Diego to provide paperwork that she needed. My tax preparer erroneously used my ex's social security number on my 2011 tax return. After turning in my amended tax papers with the correct social, I was declined regardless. The underwriter could have asked for a copy of my social security card as another form of verification. Now I am appealing this decline and hoping to get the modification done but not the DOJ one.

I have spoken with a Bruce, in the Global Settlement of BofA 1-800-669-0102, and was told by him that I was pre-qualified for the DOJ Settlement Program. It would take approximately 1 week to 1.5 months for an offer or decline letter to be sent out by the bank. Question is, has anyone used a lawyer for representation? I did not get an offer letter. I had to call BofA to be pre-qualified. How else is the bank determining how much principal to reduce in order for the homeowners to afford the monthly payment?

Please help!

bizbycherry@yahoo.com

**kentu_tiro** · 01-28-2013, 02:04 AM

Hi folks! So in December I made my last trial payment and in late December got the approval for my permanent modification. This January I made my first permanent modification payment. The reason why the payment was still high is because instead of recasting the loan for 30 years they just did the remainder of the original term which is 24 years and also used the same old interest rate (but now calculated at principal and interest). The monthly payment also includes escrow for tax and insurance which I will try to take off and manage on my own in a couple of months. Thank you guys for all your help.

Half the battle has been won. Now I am curious as to what the 2nd lien holder will do. It's a credit union. I have not heard from them in a year. Do I wait till they make contact? Wait till they sue? Or should I initiate a settlement for let's say 10% of the amount?

**TomEason** · 01-28-2013, 10:41 AM

Originally Posted by kentu_tiro

Hi folks! So in December I made my last trial payment and in late December got the approval for my permanent modification. This January I made my first permanent modification payment. The reason why the payment was still high is because instead of recasting the loan for 30 years they just did the remainder of the original term which is 24 years and also used the same old interest rate (but now calculated at principal and interest). The monthly payment also includes escrow for tax and insurance which I will try to take off and manage on my own in a couple of months. Thank you guys for all your help. Half the battle has been won. Now I am curious as to what the 2nd lien holder will do. It's a credit union. I have not heard from them in a year. Do I wait till they make contact? Wait till they sue? Or should I initiate a settlement for let's say 10% of the amount?

Thanks for your posts. If your 2nd is underwater, they won't FC. I recommend you seek to eventually settle by following the guide at post #1 of the following thread. There's no hurry; patience is key. Strategy for Settling Your 2nd

**NorCalwithBofA** · 01-31-2013, 05:05 PM

Another one here.......

After starting my inquires of a mod with B of A in August of 2009, it has been crazy. Lost documentation over and over......then denial due to investor guidelines.....then non-disclosure of investor. A lot of beating head on concrete......

Decided to find out who my investor was myself. Did securitization audit and uncovered more than I could wrap my head around at the time. Fought again for mod but was denied. They finally said I was right on who the investor was.........BONY. Wait, no we own the loan.......no actually BONY does!!??!!???

Wrapped up all the evidence and went to Federal Court. 18 months! Judge with retirement vested in MBS threw it out.

Just getting ready to file BK and as a last ditch, talked to a mod law firm. They confirmed with B of A that I was "eligible" to apply for the DOJ mod, however, they wanted a pretty penny to do this for me. I declined and called B of A directly. Asked them about the eligibility and they said, "you have not received your letter yet? You should be receiving it any time".

We also had a BK ready to go if needed. Then for several days straight, we received FedEx after FedEx with "DOJ Modification Eligible" stuff. I check with some people I knew and they said you might as well try it after all you have done.

Well, I found in one of the packages that had different return addresses a local branch address. I contacted the branch and they setup a phone interview with a CRM due to an upcoming deadline by them. We did the phone interview since we were out of town anyway.

She asked for pay stubs only since they said they had already pulled our credit. I said nothing else? She said that nothing else was required with my file. She said it would take about a week to see if it passed underwriting, and then another 30 to 60 days to get approval or denial. She also said this is the last thing you can do at this point and would have to DIL or Short Sale.

The underwriting was approved in a week, and much to both the CRM and my dismay, we were approved two days later!

The principle reduction is more than half of what is owed on the house. The payment is about 1/3 of what the original was, and the initial interest rate is 2%. Our CRM said that if we make the 3 trial payments on time, we would be permanently modified for sure. I confirmed this several times.

We are absolutely floored! The last 2 1/2 years have beaten me up pretty bad and this was a godsend!

I will post back my final numbers as soon as I get the permanent finalized. Has anyone else just recently gotten approval? My CRM said they are winding things down on the program in January and that I got in just in time.

Thanks for all the help from this site!!!

**kentu_tiro** · 03-21-2013, 03:06 PM

So I finally got my permanent loan mod settled with BofA. Hoooray! Checking online, I see my new principal balance though I am still waiting for them to update the next due date (currently says 1/1/2013 when I already paid for the permanent modification from 1/1 to 3/1).

Now I am wondering what will happen to my 2nd, which unfortunately belongs to DCU. Haven't received any contact from them for the last year or so. The only recent contact I had is when they denied my SS early last year (2012) which prompted me to try and ask BofA for the DOJ Modification eligiblity.

Can anyone please help give me an idea on what to expect from the DCU moving forward? Thanks for all your help guys!

**kentu_tiro** · 03-21-2013, 04:23 PM

Also what are the chances that I could refi this new modified balance given that my credit is bad? I am at 6.5% principal/interest now even with the doj modification. I'm thinking if I could get that rate down to around 4% it would make a significant difference in my monthly payments. Thanks!

**novembermommy** · 03-25-2013, 09:30 AM

[QUOTE=kentu_tiro;470011]So I finally got my permanent loan mod settled with BofA. Hoooray! Checking online, I see my new principal balance though I am still waiting for them to update the next due date (currently says 1/1/2013 when I already paid for the permanent modification from 1/1 to 3/1).
QUOTE]

congrats! what a weight to be lifted off your shoulders. Can I ask how long you made trial payments for and how long it took to get permanent docs? I have made 3 trial payments and they are saying now I may have to make a 4th.

thank you

**kentu_tiro** · 03-25-2013, 09:45 AM

hi novembermommy!

i did 3 trial payments. but i had some issues with getting the finalized load mod documents to sign them. but starting on the 4th payment i was already paying based on the load mod approval. it took up to the 6th payment (4th to 6th based on new modified amount) till i got the document signed properly. now my online account shows the updated principal balance and the correct due dates. they did go ahead and apply my 4th to 6th payment based on the new principal and interest split. so just keep working with your customer relationship manager. goodluck!

**novembermommy** · 03-25-2013, 10:19 AM

Originally Posted by kentu_tiro

hi novembermommy!

i did 3 trial payments. but i had some issues with getting the finalized load mod documents to sign them. but starting on the 4th payment i was already paying based on the load mod approval. it took up to the 6th payment (4th to 6th based on new modified amount) till i got the document signed properly. now my online account shows the updated principal balance and the correct due dates. they did go ahead and apply my 4th to 6th payment based on the new principal and interest split. so just keep working with your customer relationship manager. goodluck!

Thanks for the reply! Good to know they applied those 4th-6th payments like that too!

Tara