Don't want to look a gift horse in the mouth

[jlynsmom]

Here's my success story. State of California employee pay reduction due to furloughs. I came across the loansafe website and in reading the posts discovered NACA. Contacted NACA and they submitted me to BOA for modification on 2/23. Received modification approval email early this month and the paperwork through FedEx today (7/2). Existing first loan is 5 years Interest Only, current rate 6.50, payment approximately $2600, principal approximately $399,000 - identical house next door sold 2 months ago for $275,000. NACA negotiated modification, 3.75 fixed for life of loan, PITI payment $2450. Only $150 more to go towards my other bills each month, but huge savings in reality because I am now paying principal. Way excited. Here's the thing... Modification paperwork indicates they are adding $4805.52 to my principal balance for interest and escrow, but I've never missed a payment as I have been borrowing from mom each month. My paperwork is due back and I know how slow NACA moves (because they are so busy, not complaining), so don't really want to bother them, but don't want to pay anything more than necessary given how tight money is right now. Also, don't want to slow down the modification process because I'd really like to pay the $150 less next month. Given the amount of money they are saving me in the long run, should I really care about an extra $5000 added on right now? Any thoughts or similar experiences?

[faith]

Jlynsmom,
Obama announced on March 4, 2009 the $75 billion Making Home Affordable plan designed to help 9 million people stay in their homes. Critics say the program lacks accountability and does not offer principal reductions on homes that are severely upside down which is one of the major problems in housing today.

Under the program, lenders get $1,000 from the Department of Treasury for processing a modification or refinance application and an additional $1,000 if the applicant is approved. The lender would agree to a fixed interest rate let's say at 5 percent for five years, and increase at 8% thereafter.


The reality is you can changed someone’s payment to $1200 or $1400 by cutting their interest rate in the short term, but are these homeowners really going to stay in a home that they owe $50,000, $100,000 or $200,000 more than what the home is worth, in the long term?” They will never see that money back and probably won’t even break even until they’re in a nursing home, so, Obama’s program overpromised and under-delivered >>
>>
If you agree to add $4805 to your principal balance, your payment will be based on the new principal which includes the $4805 @ 3.75% for 5 years, that’s a lot of money. At the same token if you save $150 in payments a month for 5 years is $9,000. Maybe you should your lender if they know about the Obama program where the Dept of Treasury gives the lender $1000 for processing a modification or refinance application and an additional $1000 if the applicant is approved, ask them if they are aware of it, they will get $2,000 under that plan, so they can deduct $2,000 from the amt $4805 or maybe ask to waive that amount.

Are you planning to stay in the house for 30 years, maybe 10 and see if the economy changed, if not, consider bargaining with the bank adn ask for no closing costs and no fees but keep the same interest. Tell them the reason why you are asking for a loan modification due to financial hardship and it will be a burden for you to add that $4805 to the principal balance, the lender is supposed to help you and relieve you of your burden. Ask to speak to a supervisor or manager and see if they can waive that $4805.

Thanks,

[wildcats21]

when our mod was approved naca ask us if it was acceptable to us. I would contact them and see what they recommend we also had to fax in a copy of the mod to them to view.

[massage]

When is your first payment due? Aug or Sept the additional $5000 could be the interest on the payment you skip. My mod came in at end of june and first payment due aug 1st so the interest for July's skippped payment was added to back of loan and NACA didnt answer any emails or calls in time for me to decline. I really doubt anyones mod makes financial sense in the long run we are all still underwater.

[jlynsmom]

My first payment is due Aug. 1. If I can skip the July payment then it does seem closer to right although it's actually closer to 2 months interest payment and one month escrow (my account has always been an impound account). I uploaded the dogs to NACA, but they were closed today. On one document it said papers must be returned by 6th and the other said the 15th, so I went ahead and returned them today. I will try to reach either NACA or the president's office next week. If I can skip July's payment I'd be able to catch up on other stuff so that would be great. Thanks for all the feedback, have a great Independence Day!

[massage]

dont forget they can escrow 14 months (taxes and insurance) not 12 that might also make up the diff, at least they can in michigan.

[jlynsmom]

So, to update my story. I spoke with representative from NACA and she reviewed my mod docs and said that I do not have to make a payment in July, that the added on amount is the accrued interest and principal during the month of July, don't worry. Yeah! But wait, I tried to log into the BOA website today and am unable to get into my account and instead I get directed to a page that asks for a payment promise. When I call the customer service department, I am asked for a payment promise and guess what - the payment that I made in June has been uncredited (is that a word?) from my account because my bank has refused payment. I told the representative that was interesting because the money was taken out of my account on 6/10 and has not been returned. I am on the phone with a representative right now, but she just keeps placing me on hold for 2-3 minutes and "speaking with her supervisor". I will try and reach the office of the president tomorrow during regular business hours, but it looks like I'm back in the sleepless nights territory.

[jlynsmom]

Final update on this thread hopefully. BOA has updated my account to reflect all the information contained in the modification. The process took place over several days, so each time I logged in, there was something different regarding the payment, past due amount, interest rate, principal, etc. But in the end, my modification workout from NACA (Can't say enough positive about them!) is now reflected in the BOA system. I am current with no payment due until September 1 because the June payment that they backed out of the system has been used as my August payment. It took 5 months and if I can get my second (CitiMortgage) to do something with the second, I can stop borrowing from family to make ends meet each month!