I've been trying to modify my loan for 3+ years and I've failed supposedly to negative even though I thought this was completely BS.
At the beginning of this year, my case finally came up with State Attorney General's office and after about 7 months of continuous delays, they final reviewed me for modification again.
What the state Attorney general office found out is BOA's formula automatically denies you if you modified payment is higher than your origination payment....
Well in my case, I had a 5 year Interest Only Arm. My original payment was $2050 and after it adjusted it jumped to about $2500. In addition my investor doesn't approve extended terms of my loan, so even at 2% interest rate there was absolutely no way my loan would pass in their scheme.
The SA asked that my loan be re-reviewed but that it would be acceptable if they had the modified payment be higher than the original payment but less than current payment. I found this totally acceptable given that I'm behind 100k on payments, but if I was to be given a sort of reset to the loan, I could make a payment now.
So first off, if you're in this situation, call the State Attorney's office and explain you might have this problem. My contact is Adam Hollofcenter and he is awesome.
Ok, so now I need to explain a few more things... Despite getting agreement on both sides to do this, CA has seen crazy jack up of home values to the point where my LTV < 100%. A year ago is was 130% plus so I would have quailified had it none been for this glitch.
BOA denied me DOJ modification now because my LTV < 100%. I tried to prove that my home value should be closer to 435k but this argument went nowhere.
A few days ago, BOA offered me an in house modification. They said my payment would be about $2900 (although this includes escrow/real estate taxes of about $600), so the payment is actually around $2300.
More so they would offer me forgiveness on my principal of $35k in addition to what I was behind. This would bring my loan amount to $465k but they would add $20k because that was the amount of escrow i was behind. Bottom line total balance would be $485k. 2.0 % for 5 years then it would adjust to "market".
I was ready to jump for joy, but today I got a call saying I would be put on trial first and they couldn't confirm any details until the modification was "finalized".
My CRM doesn't know the final loan amount (she says it will adjust w/ trial) or what will happen after 5 years. This would be in in house modification so I'm afraid about what rules they are playing by.
How concerned should I be... I mean this seems like great news, but could this be a bait and switch situation. Also what if the market interest is 9% after 5 years? FYI my current interest rate is %3.375 and ajdust every July 1st. Will this be the cap or where start they the 5 years are up.