Does BOA modify primary residence if you have a rental property?

[Harasboa]

I have a rental property (that is upside down and rental income doesn't cover mortgage) and a primary residence. BOA phone rep denied me over the phone after giving her my income and expenses. She stated that I didn't qualify for Making Home Affordable Program because of my rental property. Can this be?

[LHarveyMadman]

Originally Posted by Harasboa

I have a rental property (that is upside down and rental income doesn't cover mortgage) and a primary residence. BOA phone rep denied me over the phone after giving her my income and expenses. She stated that I didn't qualify for Making Home Affordable Program because of my rental property. Can this be?

You are trying to modify your principal residence, not your rental property, correct?

If you are trying to modify your investment property, then MHA definitely does not apply.

If you are trying to modify your principal residence, then you should still be able to get relief from the MHA plan. However, if your back-end DTI (which includes your negative cash flow from the investment property) is too high, then this could be sticking point. But my understanding is that if your back-end DTI is above 55%, this requires you to agree to HUD debt management counseling. It does not eliminate you from consideration of modification of your principal residence.

[Harasboa]

Yes, I am trying to modify my primary residence, not my rental property. My back end DTI is higher than 55%, but that is primarily because of the rental property. I can't sell it because it's upside down about 90,000. I read the details of the MHA program and to the best of my understanding a rental property doesn't disqualify you from it. I checked the MHA website and Freddie Mac owns my loan, do you think I should not talk to the phone reps and email the recommened BOA reps given on this site. Should I contact a HUD counselor first (this is what BOA told me to do when they denied me over the phone after taking my income and expense information)? Also, someone told me that I should not include my credit card payments in my back end DTI if it is making my back end DTI too high to qualify..wouldn't this be impossible if they verify all income and expenses?
Thank You For Your Help!

[LHarveyMadman]

From the modification program guidelines:

"For borrowers with a Back-End DTI of 55% or higher, the servicer must inform the borrower of the availability and advantages of counseling and provide a list of local HUD-approved counselors. The servicer must provide the borrower with a letter stating that counseling is a requirement of the modification terms. This letter may be required by counselors in order to begin counseling. The modification will not take effect until the borrower represents in writing that he or she will obtain counseling."

So, it sounds like B of A is going to make HUD counseling a prerequisite for your modification. It also sounds like you might need a letter from B of A before you can make contact with a counselor. This seems like a minor hurdle - all you have to do is agree to counseling and that should be enough to start your modification process moving forward again.

With regard to your credit card payments, B of A might pull your credit report and see what your minimum credit card payments are. So you might not be able to hide this information. Unless you have a lot of credit card debt, the minimum payments should not be a huge factor. If you do have high credit card debt (I'm not saying that you do), then you really need to work with that HUD counselor to figure out why you are having problems living within your means.