Bank of America, foreclosure/BK help needed in TX

[stephslr]

This is the first time I have posted here, and I have searched around to see if I could find my answer. We really need some help. We have a 30 year fixed loan with B of A, used to be Countrywide. We pay $1675 a month to B of A that covers PMI and loan, we have an additional $400 for real estate taxes that we need to save monthly, as well as $54 for homeowner's insurance

First of all, my husband lost his job a year ago. He was out of work 5 months. We used up all our savings. In January 2009, he was able to secure two jobs. Those 2 jobs require him to work 80 hours per week to make the same amount of money he made before. Between the two of us, we take home $5000 a month, of which the total house payments are 43% of our income. Since January I have called B of A monthly to see what can be done to restructure our loan to include a lower payment with the taxes and homeowner's included. We pay just the $1675 on the 29th day of each month, and are never technically behind. We have not been able to save the $400 for real estate taxes since last August, and face a $4600 tax bill this December.

For the sake of our marriage, my husband's health and our 3 year old, we need to have my husband cut back hours. If he cuts back hours, there is no way we can pay the bills. We have about $20.00 in the bank each month, pay $450.00 a month in credit card payments, are behind on student loans, and owe close to $1000.00 in medical bills.

I have talked with B of A 3 times this summer about us qualifying for the Obama Plan. Each time we are denied. I called back again last Thursday and made the operator read the figures they had put in for our expenses and salary that are used to prequal you for the Obama Plan. The man stated that they had my income at gross $3300 and my husband at $6000, which is double what he makes. So for about 4-5 months now I get denied everytime I call B of A because they had the wrong income figures for my husband. We now prequalified for a loan mod, but won't know the figures for 45 days or so.

At this point we are so far behind on all the other bills besides the house, we can't pay this month. We owe about $60,000 more than it is worth. By the time we get the loan mod plan, we will be two house payments behind. We don't want to keep the house at this point, the payment would be have to be cut in half.

BofA said we could try a short sale, but the house must be on the market for 90 days before they will entertain any offers. By then we will be 4 months behind and definitely in foreclosure because things go fairly fast in Texas. Due to the medical debt, credit cards, car payment and house, we are left with a couple hundred dollars a month and nothing at the end.

Short sale is not an option. We have found a very good place to rent, not requiring us to pay rent until February 2010. We are considering just walking away from the house in November, we are thinking about staying and letting the house go into foreclosure, or we are considering Chapter 7 Bankruptcy. I also know that we can prove that we are insolvent, owing considerably more than our assets. What would be your advice, going into foreclosure, filing BK, or walking away? We cannot afford to stay here, and must decrease the number of hours my husband works.

[so-cal-gal]

This is the first time I have posted here, and I have searched around to see if I could find my answer. We really need some help. We have a 30 year fixed loan with B of A, used to be Countrywide. We pay $1675 a month to B of A that covers PMI and loan, we have an additional $400 for real estate taxes that we need to save monthly, as well as $54 for homeowner's insurance

First of all, my husband lost his job a year ago. He was out of work 5 months. We used up all our savings. In January 2009, he was able to secure two jobs. Those 2 jobs require him to work 80 hours per week to make the same amount of money he made before. Between the two of us, we take home $5000 a month, of which the total house payments are 43% of our income. Since January I have called B of A monthly to see what can be done to restructure our loan to include a lower payment with the taxes and homeowner's included. We pay just the $1675 on the 29th day of each month, and are never technically behind. We have not been able to save the $400 for real estate taxes since last August, and face a $4600 tax bill this December.

For the sake of our marriage, my husband's health and our 3 year old, we need to have my husband cut back hours. If he cuts back hours, there is no way we can pay the bills. We have about $20.00 in the bank each month, pay $450.00 a month in credit card payments, are behind on student loans, and owe close to $1000.00 in medical bills.

I have talked with B of A 3 times this summer about us qualifying for the Obama Plan. Each time we are denied. I called back again last Thursday and made the operator read the figures they had put in for our expenses and salary that are used to prequal you for the Obama Plan. The man stated that they had my income at gross $3300 and my husband at $6000, which is double what he makes. So for about 4-5 months now I get denied everytime I call B of A because they had the wrong income figures for my husband. We now prequalified for a loan mod, but won't know the figures for 45 days or so.

At this point we are so far behind on all the other bills besides the house, we can't pay this month. We owe about $60,000 more than it is worth. By the time we get the loan mod plan, we will be two house payments behind. We don't want to keep the house at this point, the payment would be have to be cut in half.

BofA said we could try a short sale, but the house must be on the market for 90 days before they will entertain any offers. By then we will be 4 months behind and definitely in foreclosure because things go fairly fast in Texas. Due to the medical debt, credit cards, car payment and house, we are left with a couple hundred dollars a month and nothing at the end.

Short sale is not an option. We have found a very good place to rent, not requiring us to pay rent until February 2010. We are considering just walking away from the house in November, we are thinking about staying and letting the house go into foreclosure, or we are considering Chapter 7 Bankruptcy. I also know that we can prove that we are insolvent, owing considerably more than our assets. What would be your advice, going into foreclosure, filing BK, or walking away? We cannot afford to stay here, and must decrease the number of hours my husband works.

I would definitely scale back on the payments to BofA. The only way to prod them into doing a mod is when you don't pay (there are a few people who were able to get a mod while continuing to pay but I don't think it happened with CW/BofA). I'd get them to processing the modification, start paying some of those other bills down. I don't know what to say about the property taxes. If your husband really needs to cut the hours, I think you will just have to do it. I do not know if it will cause BofA to fail to offer you a modification or not. Typically they will want pay stubs at some point. When the income shows as less than they now have, I don't know what will happen.

I doubt that you will have ANY success with a short sale with BofA. I have not seen that 'happening'.

As to whether to file a BK, there is a BK forum that might be of more help making that decision. Otherwise, you might be able to qualify for a low or no cost session with an attorney. It sounds like you would want to talk to a BK attorney. The only other option would be a Real Estate attorney (experience only, not someone who started working this area from 2007 on when the market crashed).

Have you considered using the HOPE Hotline? That or NACA? With Hope, do not let them refer you to 'Springboard'. I keep seeing problems with that group. With NACA, you also have to stay on top of things. The other thing you could do is to contact Barbara Desoer's office (OOP) to have them assign a negotiator to try to 'speed' your processing (lol, that is so laughable).

It really sounds like you need to know how low they can get that mortgage payment before you can decide for sure, what you area going to do. I'd say stop paying the mortgage, pay off other things or stash cash for your move or any expenses such as the BK filing. It will get more effort from BofA. Then depending on what you are doing with the BK (BTW, if you try for an MHA loan, I think you can not be in BK - check this out) vs a mod getting approved, just wait it out. I'd walk away only when there was no mod being processed and they actually set a sale date. If you get NACA or MHA to processing a mod application, they are NOT supposed to advance or start foreclosure. Sit tight but be very involved.

[stephslr]

I would definitely scale back on the payments to BofA. The only way to prod them into doing a mod is when you don't pay (there are a few people who were able to get a mod while continuing to pay but I don't think it happened with CW/BofA). I'd get them to processing the modification, start paying some of those other bills down. I don't know what to say about the property taxes. If your husband really needs to cut the hours, I think you will just have to do it. I do not know if it will cause BofA to fail to offer you a modification or not. Typically they will want pay stubs at some point. When the income shows as less than they now have, I don't know what will happen.

I doubt that you will have ANY success with a short sale with BofA. I have not seen that 'happening'.

As to whether to file a BK, there is a BK forum that might be of more help making that decision. Otherwise, you might be able to qualify for a low or no cost session with an attorney. It sounds like you would want to talk to a BK attorney. The only other option would be a Real Estate attorney (experience only, not someone who started working this area from 2007 on when the market crashed).

Have you considered using the HOPE Hotline? That or NACA? With Hope, do not let them refer you to 'Springboard'. I keep seeing problems with that group. With NACA, you also have to stay on top of things. The other thing you could do is to contact Barbara Desoer's office (OOP) to have them assign a negotiator to try to 'speed' your processing (lol, that is so laughable).

It really sounds like you need to know how low they can get that mortgage payment before you can decide for sure, what you area going to do. I'd say stop paying the mortgage, pay off other things or stash cash for your move or any expenses such as the BK filing. It will get more effort from BofA. Then depending on what you are doing with the BK (BTW, if you try for an MHA loan, I think you can not be in BK - check this out) vs a mod getting approved, just wait it out. I'd walk away only when there was no mod being processed and they actually set a sale date. If you get NACA or MHA to processing a mod application, they are NOT supposed to advance or start foreclosure. Sit tight but be very involved.

Thank you for your advice. It reaffirms the fact that we feel B of A has not done anything for us and pushed us to wait 45 days for the loan mod workout to be done, because we have always paid. They make $100 in late fees off us each month. We literally need to save $1000.00 a month to pay all the bills, not just home loan. We don't even want the house anymore, sounds silly but we are starting to resent it. We have no family time, exhausted from all the extra hours at work, and spend free time working on the house. Regarding real estate taxes, I think they will put a lien on our home and charge huge fees if we do not pay them at the end of this year/start of next. Since the taxes are not in the loan, we are not paying them (haven't all year), about $3600 behind.

What is worse, to not pay the payments for the next couple months (we can't really afford it), deny the loan mod if we get one (I know it won't save us $1000), and just walk away? Or, do we wait for foreclosure (it is fast here in TX, so I have been told)? Which is worse walking away or waiting for foreclosure? The bank won't do deed in lieu or cash for keys, but could we just stay for a couple months and mail our keys back?

[nativelasvegan]

Stephslr - I too am in Texas, about 50 east of Austin. We have a 30 year fixed loan with Skank of America. Monthly payments $2414 without taxes and insurance. My tax bill of $5600 will come due in December and I have no means to pay it. I barely make the hazard insurance payment, and pay it quarterly. The government plan provides that the servicer can reduce the payment to 31% of a borrower's gross monthly income. That payment must included taxes, insurance and any homeowner or property owner (HOA/POA) fees. I think it is important to show that under the modified payment, you will have the means to pay it. Our gross is $4800 a month x 31% = $1488. That will include principal, interest, taxes and insurance. Quite a reduction from our current $2414 without the taxes and insurance. We meet all the requirements on the makinghomeaffordable.gov website. I finally started seeing some progress after I sent my completed package to Barbara Desoer with BAC certified mail, return receipt requested. I have been verbally told we qualify and the rep told me the modified figures. this was on 7/21 when I got the "verbal". I have called every other day to see where the documents are. No one has a clue when the documents will be mailed. I have been current (pay on the 29th but stopped paying late fees because the bank has the authority to put late fees on the loan balance) until this month. I have decided to wreck my 780+ fico score and risk whatever follows by not making any more payments. From what I have learned through this website, the ones who are delinquent are being helped first.
Any chance you can hang on and fight a little longer? If you file BK, it will interfere with the modification process. I can certainly understand your situation. We are tired too. This definitely affects a relationship. I am starting to resent my home too but I will not give up. The banks took billions of taxpayer dollars in exchange for them being REQUIRED to provide homeowners with relief. I'll continue to fight until the constable is at the door. If I can help you, please let me know.

[so-cal-gal]

Thank you for your advice. It reaffirms the fact that we feel B of A has not done anything for us and pushed us to wait 45 days for the loan mod workout to be done, because we have always paid. They make $100 in late fees off us each month. We literally need to save $1000.00 a month to pay all the bills, not just home loan. We don't even want the house anymore, sounds silly but we are starting to resent it. We have no family time, exhausted from all the extra hours at work, and spend free time working on the house. Regarding real estate taxes, I think they will put a lien on our home and charge huge fees if we do not pay them at the end of this year/start of next. Since the taxes are not in the loan, we are not paying them (haven't all year), about $3600 behind.

What is worse, to not pay the payments for the next couple months (we can't really afford it), deny the loan mod if we get one (I know it won't save us $1000), and just walk away? Or, do we wait for foreclosure (it is fast here in TX, so I have been told)? Which is worse walking away or waiting for foreclosure? The bank won't do deed in lieu or cash for keys, but could we just stay for a couple months and mail our keys back?

I would stay put as long as possible, saving as much as possible in your situation.

WHY BOTHER TO MAIL THEM THE KEYS? [Trust me, they would probably not even use them or they would loose them.] Unless you get PAID something or charged less for giving them the keys, don't bother.

I would check into whether or not you qualify for the moving cost re-imbursement that is in the CountryWide California Attorney General Settlement Agreement. Although CA and 11 other states all were in on the 'deal', the stipulated settlement agreement was to apply nationwide.

Most of the 'home retention' people do not know anything about this. The CW loan had to be issued between 2003 and 2007 for you to qualify. The fixed rate loans had to be subprime. I know the fixed rate jumbo loans were subprime, others would be if they were a high interest rate.

Even with that 'deal', I'd pursue the modification. If you use NACA and possibly HOPE, they are NOT supposed to put you in for foreclosure while they have you start on the paperwork mil.

So, pursue the mod, pay the other bills and SIT TIGHT. Maybe they will surprise you with an offer you can afford. You might as well stay put while you keep at them for a modification. They already ripped you off for all these months and your credit score has taken a beating.

While the modification application is being worked on, they are not supposed to report the mortgage late to the bureaus. So start paying off the other creditors. Your credit score will improve. Make the bank do their part. Be prepared for having them reject applications. If you use NACA or HOPE, stay on top of them. Keep in contact with both your negotiator within any organization like NACA or HOPE plus check in with BofA.

LIke I said, maybe they will surprise you with a mod you CAN afford. In the meanwhile, do what YOU need to do with those OTHER bills. Make SURE you exhaust ALL possibilities of a modification before you give up and let them pursue foreclosure.

I think you really should call either HOPE or NACA. Check out all the different government programs. Would you be able to afford your house if the interest rate was dropped to 2%?

It should take a while for them to process your modification application. You should be prepared to have them reject you at least a few more times. Even if they offer you a mod that you can not afford, if you are working with a NACA or HOPE negotiator, they can work to get them to offer you something better.

You might want to check with an attorney on the time it takes for a foreclosure in TX and any questions you have about anything like a bankruptcy. There is also a 'bkforum' that is on a separate site. You might need to check if a bk affects your ability to get a Making Home Affordable (MHA) loan modification.

[stephslr]

I would stay put as long as possible, saving as much as possible in your situation.

WHY BOTHER TO MAIL THEM THE KEYS? [Trust me, they would probably not even use them or they would loose them.] Unless you get PAID something or charged less for giving them the keys, don't bother.

I would check into whether or not you qualify for the moving cost re-imbursement that is in the CountryWide California Attorney General Settlement Agreement. Although CA and 11 other states all were in on the 'deal', the stipulated settlement agreement was to apply nationwide.

Most of the 'home retention' people do not know anything about this. The CW loan had to be issued between 2003 and 2007 for you to qualify. The fixed rate loans had to be subprime. I know the fixed rate jumbo loans were subprime, others would be if they were a high interest rate.

Even with that 'deal', I'd pursue the modification. If you use NACA and possibly HOPE, they are NOT supposed to put you in for foreclosure while they have you start on the paperwork mil.

So, pursue the mod, pay the other bills and SIT TIGHT. Maybe they will surprise you with an offer you can afford. You might as well stay put while you keep at them for a modification. They already ripped you off for all these months and your credit score has taken a beating.

While the modification application is being worked on, they are not supposed to report the mortgage late to the bureaus. So start paying off the other creditors. Your credit score will improve. Make the bank do their part. Be prepared for having them reject applications. If you use NACA or HOPE, stay on top of them. Keep in contact with both your negotiator within any organization like NACA or HOPE plus check in with BofA.

LIke I said, maybe they will surprise you with a mod you CAN afford. In the meanwhile, do what YOU need to do with those OTHER bills. Make SURE you exhaust ALL possibilities of a modification before you give up and let them pursue foreclosure.

I think you really should call either HOPE or NACA. Check out all the different government programs. Would you be able to afford your house if the interest rate was dropped to 2%?

It should take a while for them to process your modification application. You should be prepared to have them reject you at least a few more times. Even if they offer you a mod that you can not afford, if you are working with a NACA or HOPE negotiator, they can work to get them to offer you something better.

You might want to check with an attorney on the time it takes for a foreclosure in TX and any questions you have about anything like a bankruptcy. There is also a 'bkforum' that is on a separate site. You might need to check if a bk affects your ability to get a Making Home Affordable (MHA) loan modification.

Thank you for the info. We would not qualify for the CW reimbursement, our house was purchased in 2008. We don't have the time to wait around months and months for the modification, nor the energy for months of rejections. We are at the point where we either pay all of our other bills or just pay the mortgage each month, that is with my husband working 75 hours per week, and me working 40 hours and caring for our son in the evenings my husband works.

B of A already messed up by having our calculations wrong for the past 4 months when considering our prequal for the Obama Plan. I do not trust them to pull something again with the modification. Anyone suggest a good real estate attorney and bankruptcy attorney in the Austin area?

[so-cal-gal]

Thank you for the info. We would not qualify for the CW reimbursement, our house was purchased in 2008. We don't have the time to wait around months and months for the modification, nor the energy for months of rejections. We are at the point where we either pay all of our other bills or just pay the mortgage each month, that is with my husband working 75 hours per week, and me working 40 hours and caring for our son in the evenings my husband works.

B of A already messed up by having our calculations wrong for the past 4 months when considering our prequal for the Obama Plan. I do not trust them to pull something again with the modification. Anyone suggest a good real estate attorney and bankruptcy attorney in the Austin area?

Play their game with the modification effort. Use the time against THEM this time. Pay your other bills. Sit tight until you HAVE to move. Have your husband cut the hours enough to preserve his health. Try to stash some cash. If you have a bank account with BofA, move it ELSEWHERE.

Work the mod effort without allowing it to upset you since you really don't care about the house. Use the mod effort to gain time to make a dent in those bills. Since BofA 'played you', just do what is best for YOUR bottom line for a change. Stay put. Keep the mod effort going since they are not supposed to advance foreclosure while processing a modification application. Use one of the advocacy groups as your negotiator to help promote the mod effort. Monitor that effort to make sure you know of any cancelation of any application.

Play it like it is a chess game and your strategy is to have a healthier family AND financial bottom line at the lender's expense for at least a few months. You don't know. There have been cases where BofA did not press for foreclosure for over a year. A request for a modification or a forebrearance was kept active.

Meanwhile, with you NOT paying, they have much more incentive to put something together.

As far as trusting them, oh, boy! I have an actual modification CONTRACT (one of the CA AG ones) that BofA REFUSES to honor. We shall see. They are tangling with an attorney with my case. You talk about TRUST and BofA in the same sentence? ROFL.

No, use the time to YOUR advantage. Keep the mod effort going as long as possible. Get as much of your other bills paid down as possible unless you really need to do the bk route sooner on those.

Just make every effort to keep an honest modification application effort going.
Minimum result: more time to pay off other debt.
Maximum result: maybe a mod plus you have more of that other debt paid down.

[stephslr]

No, use the time to YOUR advantage. Keep the mod effort going as long as possible. Get as much of your other bills paid down as possible unless you really need to do the bk route sooner on those.

Just make every effort to keep an honest modification application effort going.
Minimum result: more time to pay off other debt.
Maximum result: maybe a mod plus you have more of that other debt paid down.

So this will sound bad, but we are so sick and tired of making an effort, being proactive and responsible, that is what led to us with high credit card debt/minimum payments in consolidation, requesting an extension on utility bills, but always paying everything before 30 days late. We literally can't keep working so much, we have a 3 year old. He deserves some enjoyment and parents with enough energy to play with him.

Our plan at this point, definitely move our checking account from BofA (thank you for that suggestion), consult with a BK attorney as to what would happen with the back property taxes (around $5000) that we cannot pay now or really ever at this point, the high credit card debt that will take 5 years to pay off, as well as what happens if we do go into foreclosure and owe money back to the bank. I am interested to see what mod offer looks like. My husband and I determined today that it would be have no more than $1000 a month with PMI, hazard insurance, and real estate taxes, for him to cut down to 55 hours a week instead of 75 and for us to still be able to pay all bills. We would then have about $200 in our account at the end of the month.

[so-cal-gal]

So this will sound bad, but we are so sick and tired of making an effort, being proactive and responsible, that is what led to us with high credit card debt/minimum payments in consolidation, requesting an extension on utility bills, but always paying everything before 30 days late. We literally can't keep working so much, we have a 3 year old. He deserves some enjoyment and parents with enough energy to play with him.

Our plan at this point, definitely move our checking account from BofA (thank you for that suggestion), consult with a BK attorney as to what would happen with the back property taxes (around $5000) that we cannot pay now or really ever at this point, the high credit card debt that will take 5 years to pay off, as well as what happens if we do go into foreclosure and owe money back to the bank. I am interested to see what mod offer looks like. My husband and I determined today that it would be have no more than $1000 a month with PMI, hazard insurance, and real estate taxes, for him to cut down to 55 hours a week instead of 75 and for us to still be able to pay all bills. We would then have about $200 in our account at the end of the month.

I think you 'got' it. You're welcome. I saw one other victim had a BofA checking account and funds were taken to cover the loan late fees!

BofA does NOT cooperate with SS. If your attorney wants to do that, all that happens is you will not be able to even try for the mod and you will probably SHORTEN the time frame that you have to work on those debts. Also, get with HOPE to get them to working as your negotiators. Check to see if they say you are qualified. Some of the government programs may have restrictions on a bk situation. So you might need to get into the mod 'queue' and try to keep the other creditors happy with the payments you start making to them. Check things out with the BK attorney but also with the HOPE or NACA programs that will work as your negotiators.

You may be able to ask a HOPE counselor if the further reduction of income, with your husband curtailing the tremendous hours, will lower the income to a level too low for any modification. I don't think they can have any issue with someone forgoing an onerous work schedule that is harming the person's health but we do not know enough about 'minimum' income levels as yet on these programs.

[stephslr]

I think you 'got' it. You're welcome. I saw one other victim had a BofA checking account and funds were taken to cover the loan late fees!

BofA does NOT cooperate with SS. If your attorney wants to do that, all that happens is you will not be able to even try for the mod and you will probably SHORTEN the time frame that you have to work on those debts. Also, get with HOPE to get them to working as your negotiators. Check to see if they say you are qualified. Some of the government programs may have restrictions on a bk situation. So you might need to get into the mod 'queue' and try to keep the other creditors happy with the payments you start making to them. Check things out with the BK attorney but also with the HOPE or NACA programs that will work as your negotiators.

You may be able to ask a HOPE counselor if the further reduction of income, with your husband curtailing the tremendous hours, will lower the income to a level too low for any modification. I don't think they can have any issue with someone forgoing an onerous work schedule that is harming the person's health but we do not know enough about 'minimum' income levels as yet on these programs.

Interesting, I never even thought about the fact that we literally may not make enough money if my husband reduced his hours to be considered qualified to pay the loan.

We should never have been given it in the first place, about 43% of our gross. I think Countrywide (at the time) passed it through because our property taxes and hazard insurance were not included in the payment.

Thanks again. We feel at peace with our decision to let go of the house, however it goes. With reduced hours to a more realistic amount (say 80-100 hours between us instead of 120), I really couldn't expect B of A to approve a loan mod that would be 31% or less of our gross. They would have to do literally 1-2% interest and also do a principle reduction of about 50K. Not going to happen.

[so-cal-gal]

You may be in a situation where they will not even push to foreclose if they can not do a mod.

It is STILL worth trying for the mod. Stick with your plan. Let us know if there are any responses. We are all trying to help each other here.