There are a lot of experienced and intelligent people posting on this website! It an amazing source of information and we are hoping for some insight into our current situation. I have emailed details of our 3 year long battle with BofA to the Office of the President, the CFPB & the Office of Mortgage Settlement Oversight. Our new CRM has been very pleasant and as helpful as she can. I believe sending those emails helped expedite our mod. We just want to hear opinions on whether this seems like a "fair deal". Apologies in advance for length of post, but wanted to try to be thorough.
-Original Countrywide 2005 -$1,000,000 interest only @ 5.375 for 10 years then option arm for 20 (4,474/mth) did not include taxes or principal
-Huge loss of income...missed last 22 payments totaling about $98,000 & they have paid our country taxes (1.6% tax rate) totaling about $17,000
-Fedex Package with DOJ offer showed up on our doorstep late Sept
-BofA asked for paystub and P&L for our small business...we sent in paperwork mid Oct.
-Two weeks later they offered us a DOJ Trial Mod with three payments of $5,874 each. (by our calculations 37% of our gross income, but include principal, interest and taxes)
-Our home is no longer listed on the Recontrust website...completely gone...not just delayed sale date
Here is the part of the letter we are most concerned with:
"If you complete this trial period plan by making all payments as outlined below, any past due late fees will be waived, interest and advances that we paid on your behalf will be added to your principal balance and your loan will be brought up to date. We will them permanently reduce your principal balance by the amount of $236, 734.55. In addition we will reduce you interest rate to 2.75%"
Disclaimer at bottom of letter states amounts (reduction and interest rate) are based on current status of loan. Also, if interest rate is below current market rates, after 5 years, it will increase by 1% yearly and cap at market rate that was being charged when loan was prepared and remain fixed at that rate for life of loan.
Here are our QUESTIONS (CRM couldn't answer these--but she said the trial mod payments were based solely on our gross income...nothing else):
1. Our understanding is that the trial mod payments are based on current amount due before reduction (approx $1,115,000). Does that sound right?
2. The reduction will be noted after payments are made...leaving us with a principal balance of approx 878,000 (this is about current market value)
3. We also believe that the length of the loan stays the same, so payments should be based on 23 years left on loan.
4. We used a simple online mortgage calculator to plug in those numbers...878,000 at 2.75 for 23 years with 1.6% tax rate and got a number very close to their offer. Did we do the math right?
5. Our original down was less than 20%, but we aren't sure if we were paying mortgage insurance in our original monthly payment...does anyone know if trial mod payments automatically include mortgage insurance and/or homeowners?
6. Finally, will the three trial payments be deducted from the balance owed before principal reduction will take effect?
Again, this site has been a wealth of information and guidance for us during the most difficult time in our lives. We welcome and appreciate any and all advice from the community that may help us decide next steps. Our good thoughts are with everyone who is going through this ordeal...