BoA Loan Mod Help - Expences to Income

[callyjim]

I was three months behind and kept trying to get a loan modification but they kept telling me I didn't qualify when I gave them my income / expences. I was put into a repayment program and was able to get current after selling everything but my children. I was told once I get current I can reapply for a loan mod. Can anyone help me by letting me know what type of numbers to use,?? What % of income to expences. I know my income is what it is but you can play with the expences to some extent. Just wondering why they said I didn't qualify before.

[imlars]

Originally Posted by callyjim

I was three months behind and kept trying to get a loan modification but they kept telling me I didn't qualify when I gave them my income / expences. I was put into a repayment program and was able to get current after selling everything but my children. I was told once I get current I can reapply for a loan mod. Can anyone help me by letting me know what type of numbers to use,?? What % of income to expences. I know my income is what it is but you can play with the expences to some extent. Just wondering why they said I didn't qualify before.

A repayment plan tells me you show a monthly surplus on your financials. Try to juggle your expenses so that you have a $100-$150 surplus per month as this is what most lenders consider as enough for any emergencies that may come up. Especially with BOA you do not want a monthly deficit as they will say you cannot afford the home.

[nmwadam]

When you show your financials, should you be basing them on the current mortgage or the modified amount? I don't see why you would want to show a surplus based on the current mortgage, wouldn't that tell them that you can afford it without needing it to be modified.

I think that is the confusing part for most people when doing the financials. I for 1 can afford what the modified payment would be, but I have a deficit of around 250.00 a month based on the current mortgage, modified to the hamp 31 pct and I am golden.

[imlars]

Originally Posted by nmwadam

When you show your financials, should you be basing them on the current mortgage or the modified amount? I don't see why you would want to show a surplus based on the current mortgage, wouldn't that tell them that you can afford it without needing it to be modified.

I think that is the confusing part for most people when doing the financials. I for 1 can afford what the modified payment would be, but I have a deficit of around 250.00 a month based on the current mortgage, modified to the hamp 31 pct and I am golden.

I base mine on the current mortgage amount and juggle the expenses so the client doesn't have a deficit but has very little to spare.
The lender has easy access to the actual amount of your mortgage so why get caught in a lie? That would just make them look harder at everything else for other "mistakes" You want to break close to even or have no more than a $150 surplus per month. This is what most lenders consider as an acceptable amount for "emergencies" per month.
The lender is going to require copies of at least 2 consecutive paystubs from the last 30 days so you have to be straight with them there too.
You better make sure that your loan is a Fannie or Freddie before you submit a financial worksheet with a deficit on it. Any other investor will consider it as a sign that you can't afford to keep the home and tell you to short sale it.
If you have a government backed loan you are golden, but if not, it could be a really rough ride for you from this point forward.
Keep in mind the 31% HAMP/MHA refers to is 31% of your gross income and verification documents will be required to accompany the financials. Verification docs will include 2 consecutive pay stubs from the last 30 days. as well as bank statements from the last 60 days and tax returns for the last two years, including W-2's. Make sure that you send ALL schedules and forms, and that you sign the copy. It must be your signature, not the preparers. They will cross reference the figures to prove authenticity. Include one electric, natural gas or water bill with your name and address on it to prove occupancy. A 4506-T, and make sure it is completely filled out. Read and understand the entire document before you sign it. You will also be required to provide a hardship affidavit, not a hardship letter, they want their form and again take the read the time to read it. To get the 2 government forms needed go to treas.gov.
If you give them everything they could possibly need in one package it is more likely to get picked up just because it is complete. I highly recommend the package be sent by FedEx, and it needs to be signed for. You can go online and get confirmation of the delivery and use it for future reference when the lender says they didn't recieve them.
Keep copies of everything for your records. Be prepared to resend them updated pay stubs and bank statements every 30 days. But you may be able to get away with faxing them in each month. Do it without being asked.
Good Luck!

[imlars]

Originally Posted by callyjim

I was three months behind and kept trying to get a loan modification but they kept telling me I didn't qualify when I gave them my income / expences. I was put into a repayment program and was able to get current after selling everything but my children. I was told once I get current I can reapply for a loan mod. Can anyone help me by letting me know what type of numbers to use,?? What % of income to expences. I know my income is what it is but you can play with the expences to some extent. Just wondering why they said I didn't qualify before.

People who are current are always going to have to step to the back of the bus, so you were misinformed. If you happen to fall behind again it may lead the lender to believe that you need a longer term fix.
No more than 42% of your income should go to expenses other than the mortgage itself.
There are alot of variables to consider, what state state you are in, who the servicer is, who the investor is, how delinquent you are, are you in foreclosure, do you have any funds set aside for a contribution amount?
If you aren't able to make a full mortgage payment save as much of it as you can because no matter what the lender says, modifications are not free. They will request a "good faith" payment to show them you are willing and able to make payments on a regular basis and they do not give you much time to get it into their hands. Western Union Quick Collect is the most economical way to go. It has a flat fee no matter how much you are sending and you can get your hands on verification of delivery and acceptance, if the lender claims they did not recieve it, very easily.

[davephx]

Budget is with modified payment amount otherwise would have a deficit or if not you don't need modification.

Key factors is gross income x 31% is your "affordable" piti. If your 1st Mtg is below that already you don't qualify.

Take the affordable piti and deduct taxes and insurance (HOA if have) and that is what has to amortize your current mortgage balance + back interest due at as low as 2%/40 years.

So Income can't be too high or too low.

Than you have to pass the Net Present Value test, which is why they ask you so many questions. If you not underwater you may not pass but there are other factors. The more underwater you are the better for the NPV test.

There are no fees or "contribution amount" if a regular HAMP (I think contibution is for FHA but forget) If qualified they set you up with trial payments at income x31%.

Than the paperwork just begins as you have to verify everyting send in the stuff lmlars mentions etc. But you will get a instruction package with the Trial Mod Agreeement which lists all the documnt requirements.

Than after 3-8 trial payments you do much of it again except this time the forms have to be notarized. Then it goes to underwriting with most servicers for consideration. Than goes to investor for approval.

If they put you on a forbearance plan where you catch up with back payments you may have to compete it before they will consider for HAMP. So its best to try and get on HAMP vs forbearance.