Bank of America MHA Trial Payment Way Too High

[JaFlNowWhat]

After nearly a year (beginning Dec 08) of trying, we finally rcvd our loan mod package. The MHA Trial payment is $55 less than our original payment amount and is 44% of our gross and rate is 5.75%

Upon receipt of package, contacted BoA to ask why the trial payment was so high with respect to % of income, and why rate not at 2% (original loan was 6.0%).

I was told that if I did not agree to the terms, then just don't sign paperwork and re-apply.

Can anyone advise?

Thanks very much

[ama125]

So, this may seem like a stupid question and by no means do I intend to insult your intelligence, but are you sure it is MHA? Does it say Making Home Affordable on it? Does it have the govt. logo for MHA on it? It is not uncommon for BofA to offer an in-house mod instead of MHA. Of course, it is always possible they did the calculations wrong. MHA is a one shot deal, so if the payment amount does not add up, I would not sign it. I would contact the person you've been working with to straighten the matter out. If you do not have a contact person, I would email OOP and start fresh. Good luck!

[JaFlNowWhat]

The cover letter states ..."as part of your three month trial period under the Federal Gov'ts Home Affordable Modification Program." Bottom right of page -- logo of 3 rooftops over Making HOME Affordable" p3 "Home Affordable Modification Trial Period Package"

It appears to be an official MHA to me. That is part of the confusion. My clear understanding (and please correct me if I am wrong), is that the payment amount is to be reduced to 31% of gross, and that is to be achieved by 1. lowering int rate to floor of 2%, 2.followed by extending term to upto 40 years, and finally, 3. principal reduction.

The reps have stated (in different conversations with diff't reps over the last few days) that "the permanent payment will drop to 31%", "the permanent payment will the same [as it is now]", "we added back the past due amounts, this is why it is so high", "31% is just a qualifier for eligibility, not a factor in calculating payment". Clearly they have no idea of what the law is.

But nevertheless, I need help quickly because BoA is requesting the docs back by Nov 1. We don't have an official contact, only an analyst in loss mitigation, a person with whom I have left over 50 messages for to no avail.

Has contacting the oop been of any help? I have tried contacting local congresspeople.

Finally, just so I am clear, if I DON'T return/sign package does this prevent us from applying for MHA again. My husband suggested signing with a caveat that this number represents an incorrect amount. We are really at a loss as to what to do, noone seems to know what to do.

Thanks again

[ama125]

The only way I was able to get a negotiator was by contacting OOP. I am awaiting documents, so I don't know if my figures will be off until I get something. I understand your confusion and it does not make any sense to me. The trial payments should be close to the permanent payment. Are you able to make the trial payments? The problem is once you are in the trial, you have to complete it. If you fail the trial, then you likely can't try again. When did you receive the paperwork? They should give you enough time to sign and return it. When is the first trial payment due? If they are telling you don't accept it and re-apply, then maybe that is what you should do. I wish I could give you some solid fool-proof advice, but unfortunately, it is hard to say what they will do. Good luck!

[JaFlNowWhat]

We are barely scraping by but can make the payments. I will send out the email to oop and mha compliance. Thanks for your help.

[BadBobMo]

1st there is no "Law", but you need to talk to someone if your payment is not close to your gross income of 31%. I would not put it pass them to use HAMP logo on what ever they want. The numbers look like in-house mod. I had to ask my lender 2 times that I did not want there in-house, be careful, they are like snakes in the grass.
It's all Greed period!

[donnac]

How far behind were you in payments?

[creativeman]

Hope they can decrease the trial payment

[JaFlNowWhat]

We are 7 months behind. We have been on a forbearance with them since April, and have continued making regular payments since then.

According to cyberhome.com we have 40-130k equity, but the relevant comps have us in the hole for about 25k, plus the county says we have approx 9k in equity. So I don't know if they are trying to string us along to eventually get the property.

I have tons of calls in to the analyst (who I have been told is the only person that can adjust the figures), but no luck. I just sent out email to oop and MHA compliance. Spoke with Stewart Title a/k/a Home Retention Dept who also said numbers sound like an in-house mod and error must have been made.

Does anyone know if we send in signed package w/high amount, if somehow that amount can later be reduced?

[JaFlNowWhat]

When you say it is not the "law", I am not sure what you mean. I understand that the bank can manipulate the NPV and other variables so that that are not required to modify, and can foreclosure/force a short sell etc.

However, according to http://www.treas.gov/press/releases/...es_summary.pdf [Dept of Treasury's Summary of MHA guidelines],

"servicers are REQUIRED (note: red is my emphasis) to service all eligible loans under the rules of the program unless explicitly prohibited by contract", furthermore

"servicers will follow a specified sequence of steps in order to reduce the monthly payment to NO MORE than 31% of the gross monthly income"

"The modification sequence REQUIRES first reducing the interest rate (subject to a floor of 2%), then if necessary extending the term or amoritorization of the loan up to a max of 40 years" followed by princilple redux.

So again, I know that don't have to modify loan, but if they are going to get federal money for closing my loan under the MHA program, I need to actually be benefiting from the program.

"monthly payment includs principal, interest, taxes, insurance, flood, HOA"

[MyHAMP]

Originally Posted by JaFlNowWhat

After nearly a year (beginning Dec 08) of trying, we finally rcvd our loan mod package. The MHA Trial payment is $55 less than our original payment amount and is 44% of our gross and rate is 5.75%

Upon receipt of package, contacted BoA to ask why the trial payment was so high with respect to % of income, and why rate not at 2% (original loan was 6.0%).

I was told that if I did not agree to the terms, then just don't sign paperwork and re-apply.

Can anyone advise?

Thanks very much

Hmm, strange...
The initial package shouldn't even show the interest-rate and payment-conditions at that point in time - only the trial payment amount and the due dates. Set amount should be very close to 31% of your gross, maybe slightly higher. But 44%? No way!

BTW, how did the paperwork look they wanted you to sign? Was it a trial period plan? How many copies were you supposed to provide? Did they request additional paperwork?

To answer your question: If you reject, you can still apply for HAMP.

I agree that I would start fresh from scratch and ask for a new HAMP-evaluation. This offer probably only shares the logo with HAMP - nothing else. Unbelievable what these lenders do with this program. No wonder everybody is complaining!

[St.LouisBlues]

Dont sign....hold out.

Never give em another nickel until they make a viable deal

[Hopefull2009]

Have you submitted recent financial information? If you haven't, there's a possibility the trial amt is based on old financials they have in the system. It's only a trial and the final true payment would be based on actual up-to-date financial information. I'd call and ask what they are using as your gross income.

[JaFlNowWhat]

Thanks for everyone's support. I believe I have some good news.

After 4 hours on the phone (just today) with assorted folks they have agreed to lower trial payment to 34% of gross - saving us about $450 -- Yeah!!!. For anyone interested this is what I did:

1. Called the Home Retention Dept a/ka/ Stewart Title (the phone number listed on MHA application). They promptly told me they only handle the processing of the file, that I need to call BofA, as the analyst is the only one who does the calculations.

2. Called BofA, told that I need to call Stewart Title (above). Then I asked for a supervisor -- this is a VERY important step that I learned from this board, told supervisor I URGENTLY needed to speak to analyst (have been leaving messages for analyst 2x week for last few months with no luck), and explained to supervisor that the MHA program requires 31% of gross, etc... He did not believe me, so I read to him excerpts of the US Treasury March 2009 Summary of MHA Guidelines --- http://www.treas.gov/press/releases/...es_summary.pdf

which state servicers are REQUIRED to make payment that is 31% of gross, with specified steps to reach (i.e. lower apr, princ redux). The guidelines also require this amount to include taxes, insurance, HOA, etc. Furthermore, I explained that I had contacted MHA compliance to inform them that BofA was using in-house mod terms on MHA applications. This act allows BofA to receive the $1000 payment for allegedly completing an MHA file. I told him that was unethical and illegal.

3. By now, analyst somehow became available (to supervisor, not me), and contacted Stewart Title reworked the numbers. I was told to disregard the first package, that a new package will be sent out w/in 30 days with the reduced amount. We will see.

[MyHAMP]

Good job, JaFlNowWhat!

You see, depending on your servicer, this HAMP can be very stressful and a headache - BUT if you put them under pressure, you will get what you want.

The trial being at 34% is where it's supposed to be. Our trial payment is also about 10% above my calculated 31% of our gross. I'm hoping - once and if we get our final approval - we get another reduction of this 10% but we could certainly live with the current payment as well.

[BadBobMo]

JaFlNowWhat!
Good job now that your up on your horse and geting ready for your trail I mean "Trial ride"
hand on tight.

I explained that I had contacted MHA compliance to inform them that BofA was using in-house mod terms on MHA applications

Now you know the Law!

[St.LouisBlues]

Way to go

Now u r beginning to get it

they are desparate snakes

just like on the streets

when in a snake pit do as snakes do