BofA/FHA Frustrations - Any Thoughts?

[bbwbw80]

I posted on here some time ago about pursuing a loan mod through Bank of America (BofA) to attempt to head off any issues I knew I would be up against with some junk going on at my company.

I was told that I would have to be at least 90 days behind due to my loan being an FHA loan....so I did that, only to learn that was not the case.

Regardless, we started pushing for the loan modification again.

In the meantime, though, I took a 20% reduction in pay at work. Now my front end ratio is above the 31%.

But here are my concerns:

1. According to HAMP-FHA, they will only reduce to 31% of gross. That is only a $120 reduction in payment. My income took a much larger hit than that ($800/month take home).

2. It is impossible for me to keep making my payments at the current amount due to this reduction. The good news is I have another job that I could start at soon, but due to some "red tape" it might not become open for a while.

3. They are telling me that it is another 60-90 days from now, but I'm afraid by then it will be too late. It is simply not possible for me to keep up with my payments over that much period of time.

My wife and I are working through as many expense reduction ideas as possible, but just not finding enough ways to make living affordable. I'm afraid that if they hold to the HAMP guidelines that I'm screwed...the $120/month reduction would only be scratching the surface.

I'm hoping the new job becomes available soon, but in the meantime, weighing my options. At this point we are thinking of selling and moving if something doesn't happen soon.

With all of that being written, what are my next steps? Is there anything that can be done to accelerate the process?

[bbwbw80]

No one has any thoughts on this?

[aubie37]

I also have an FHA loan that was modified to the 31% ratio using both jobs. My loan is via CitiMortgage. Unless there is an unusual set of circumstances all programs seem to adhere to the 31% gross ratio standard.

Good luck.

[baretta]

aubie37- were you modified under FHA HAMP or just a regular MOD? If FHA HAMP were you 1st denied for the other 3 loss mitigation tools?

bbwbw80- I have an FHA with BOA as well. I don't think they have any idea when it comes to FHA programs...I finally called HUD National Servicing Center to get answers...they told me that before you can be reviewed for FHA HAMP (which is the 31% thing) that you 1st had to be denied for one of their other 3 loss mitigation tools...special forebearance, loan mod or partial claim. From what I see in your situation I think you might benefit from a Special Forbearance Typ II...which is putting off or lowering payments for a time combined with either a loan mod or a partial claim. Go to hud.gov and type these 3 tool names into the search bar and read up. I have found that you have to educate yourself cuz the banks don't have a clue.
Good Luck to you!

[imlars]

Originally Posted by bbwbw80

I posted on here some time ago about pursuing a loan mod through Bank of America (BofA) to attempt to head off any issues I knew I would be up against with some junk going on at my company.

I was told that I would have to be at least 90 days behind due to my loan being an FHA loan....so I did that, only to learn that was not the case.

Regardless, we started pushing for the loan modification again.

In the meantime, though, I took a 20% reduction in pay at work. Now my front end ratio is above the 31%.

But here are my concerns:

1. According to HAMP-FHA, they will only reduce to 31% of gross. That is only a $120 reduction in payment. My income took a much larger hit than that ($800/month take home).

2. It is impossible for me to keep making my payments at the current amount due to this reduction. The good news is I have another job that I could start at soon, but due to some "red tape" it might not become open for a while.

3. They are telling me that it is another 60-90 days from now, but I'm afraid by then it will be too late. It is simply not possible for me to keep up with my payments over that much period of time.

My wife and I are working through as many expense reduction ideas as possible, but just not finding enough ways to make living affordable. I'm afraid that if they hold to the HAMP guidelines that I'm screwed...the $120/month reduction would only be scratching the surface.

I'm hoping the new job becomes available soon, but in the meantime, weighing my options. At this point we are thinking of selling and moving if something doesn't happen soon.

With all of that being written, what are my next steps? Is there anything that can be done to accelerate the process?

For the FHA/MHA modification they say you don't have to be behind but if you aren't you get stuck in the imminent default dept. It's a black hole you will sit in for months.
Lets say your usual mortgage pmt is $1200 per month but you only have $1000. Don't make the mortgage payment but SAVE THAT $1000 each month. One way or another you are going to need it. You will be required to make the first trial period payment within a short period of time. That first payment temporarily stops any forclosure proceedings. Making the 3 consecutive payments show you can consistantly make the new payment.
After you complete the trial period it could be 3-6 months before you get the final mod agreement but just keep making that payment.
The interest rate on the MHA goes down to 2% for the first 5 years. The FHA goes down to 3.5% for the first 3 years I do believe. Otherwise they are alot alike.
Your mortgage, taxes and insurance should not exceed 31% of your gross monthly income. 31% of your current gross income, which you will illustrate by sending them copies of 2 consecutive paystubs from the last 30 days. I don't know how long ago you first sent in your information but maybe you need to put together an updated financial package.
You can download the instructions and forms you need from your lenders website. Make sure you throughly read and follow the instructions. I would FedEx the financial package and all supporting documents to the lender and require a signature. Faxes get lost in the shuffle. FedEx can be tracked online. Call the lender after you verify online that the "work out" package was signed for at thier end. Keep notes with dates and times in a notebook for future reference. Get the Reps first and last name or ID# each time you speak to them.
It's not a fast process, 3-6 months, but if you are saving what you can each month that you are unable to make a full mortgage payment you'll get through it just fine. Just the lower interest rate alone is worth it and it includes the taxes and insurance too. It really is the best modification out there.

[aubie37]

Originally Posted by baretta

aubie37- were you modified under FHA HAMP or just a regular MOD? If FHA HAMP were you 1st denied for the other 3 loss mitigation tools?

bbwbw80- I have an FHA with BOA as well. I don't think they have any idea when it comes to FHA programs...I finally called HUD National Servicing Center to get answers...they told me that before you can be reviewed for FHA HAMP (which is the 31% thing) that you 1st had to be denied for one of their other 3 loss mitigation tools...special forebearance, loan mod or partial claim. From what I see in your situation I think you might benefit from a Special Forbearance Typ II...which is putting off or lowering payments for a time combined with either a loan mod or a partial claim. Go to hud.gov and type these 3 tool names into the search bar and read up. I have found that you have to educate yourself cuz the banks don't have a clue.
Good Luck to you!

I had a special forbearance, forbearance, then finally a modification to guidelines. I am at 31% for gross income between my full time and my part time job. Up until writing my senators and filing a BBB complaint the loss mitigation reps kept telling me I needed to make more money. Believe me I wish that I did. They did not do a partial claim but did add the past due interest and my new monthy payment starts 1/1/2010.

[JennaGG]

Originally Posted by imlars

You will be required to make the first trial period payment within a short period of time. That first payment temporarily stops any forclosure proceedings. Making the 3 consecutive payments show you can consistantly make the new payment.

I know I'm hijacking this but I have a question on that.

We have a loan through BOFA as well. We are trying for a modification through the MHA plan. We were under the impression that the 1st payment we made, the one that said if you want to do the modification send us X amount immediately, was considered to be the 1st of the 3 payments.

Are you saying that is not the case & the we are required to send in that initial payment PLUS the 3 payments?

Thanks.
Jenna

[baretta]

on the FHA interest rate...I was told that they take the current fannie mae rate round up 1/8 of a percent and then add .5...where did you hear 3.5%???

[phones772]

I have a FHA loan with BOA and I was told that FHA likes to see no negative in your monthly income. Currently I am 300.00 in the negative, this is due to reduce income, does anyone knows this for a fact? I am trying to get approve for the FHA-HAMP. Can anyone who's had a FHA loan modify uder HAMP with BOA shed some light on criterias.

[imlars]

Originally Posted by JennaGG

I know I'm hijacking this but I have a question on that.

We have a loan through BOFA as well. We are trying for a modification through the MHA plan. We were under the impression that the 1st payment we made, the one that said if you want to do the modification send us X amount immediately, was considered to be the 1st of the 3 payments.

Are you saying that is not the case & the we are required to send in that initial payment PLUS the 3 payments?

Thanks.
Jenna

That first payment that you send in response to the letter does start the ball rolling but even though there are supposed to be only 3 trial payments between you and the permanent mod we have seen it stretch out as long as 6 months. Don't worry about counting the payments, just keep on making them. You will eventually get the paperwork for the permanent mod and the payments will be very close if not exactly the same as the trial period payments.

[baretta]

Can you choose to pay your whold annual escrow amount upfront, or yourself so that it lowers your monthly payment? I have an FHA loan so I pay taxes, insuracne and MIP. My escrow amount is going up by $100/mth in December and it makes it so that the numbers change and I don't qualify for the FHA HAMp anymore! Also, anyone know when they "lock in" the interest rate??

[imlars]

Originally Posted by baretta

Can you choose to pay your whold annual escrow amount upfront, or yourself so that it lowers your monthly payment? I have an FHA loan so I pay taxes, insuracne and MIP. My escrow amount is going up by $100/mth in December and it makes it so that the numbers change and I don't qualify for the FHA HAMp anymore! Also, anyone know when they "lock in" the interest rate??

Unfortunately you do not have a choice. If you get the HAMP the taxes and insurance must be included in the monthly payment.
There are several reasons that your escrow amount could have gone up.
If you had an escrow shortage because you missed mortgage payments the lender may allow you pay it up to date in a lump sum. If it is going up because the property taxes are going up, that's something totally beyond your control and it wouldn't affect you qualifying. Was there a lapse in your insurance coverage? Some lenders will force place their own insurance if there is not enough in the escrow account to cover it at the time. Lender placed insurance costs you 3 times as much as your own insurance policy would. And only covers the home itself, nothing in it. Contact whoever has your car insurance and see if they have a multi policy discount that you could take advantage of by insuring your home with them also.
With the HAMP the 2% is for the first five years. The rate then goes up 1% per year for 3 years and caps and fixes for the life of the loan. FHA is a little different. I think the lowest their interest rate can go is 3.5% and it may be for only for the first three years. Don't quote me on that, check out their website, probably FHA.gov.

[imlars]

Originally Posted by baretta

on the FHA interest rate...I was told that they take the current fannie mae rate round up 1/8 of a percent and then add .5...where did you hear 3.5%???

3.5% is what their modifications start out with. The HAMP goes down to 2%. Check out Mortgage101.com

[imlars]

Originally Posted by phones772

I have a FHA loan with BOA and I was told that FHA likes to see no negative in your monthly income. Currently I am 300.00 in the negative, this is due to reduce income, does anyone knows this for a fact? I am trying to get approve for the FHA-HAMP. Can anyone who's had a FHA loan modify uder HAMP with BOA shed some light on criterias.

At BOA it used to be that in order for a borrower to be pre-qualified they could not have a deficit. If you had a deficit they suggested short sale or deed in lieu under the premise that you just could not afford to keep the home.
Now, with the HAMP it seems to be okay to have a small monthly deficit. Is there anywhere in your monthly expenses that you could cut back to reduce that to $150 per month? Lenders usually allow $150 per person per month for groceries. Trim down your phone bill, drop the HBO from the cable service, etc...
The FHA/HAMP is available to all borrowers with FHA loans.
The lender will use your pay stubs, P&L's, bank statements and tax returns to decide if you can afford to keep the home. If it looks like you can keep the loan performing they will modify the loan by lowering the interest rate for a certain number of years, extend the term of the loan up to 40 years or a combination of the two.
Go to your lenders website for all the forms and instructions. Follow the instructions exactly. Make sure that everything they ask for goes into an envelope and send it by FedEx with signature required. 2 Day is less expensive than overnight and it will still beat a fax. Faxes get lost on a regular basis at the lenders. Keep a copy of your tracking number and you can get a delivery confirmation online. After about a week call customer service and confirm that everything has been received. If they deny having it just have your delivery confirmation handy and read off the date, time and who signed for it off for the Rep. You will probably get the Loss Mitigation Dept at that point. If you can get that direct number it will help you greatly as customer service doesn't have access to the information you are looking for. If you have problems you can always contact FHA and they will help you out.

[baretta]

Phones772-
You HAVE to use this example, it is the only way I could figure out if I qualified for the FHA HAMP or not, and I just got pre-qualified today! Just plug in your own numbers! For the interest rate find the current Fannie Mae rate round down 1/8 of a percent (.125) and then add .5 pts. Let me know if you need help and I will try to explain better! Good luck!

Examplefficeffice" />>>

>>
Mortgagor had a reduction of income and is delinquent 3 full mortgage payments. The unpaid principal balance on the mortgage on the date of default is $150,000 and the monthly payment is $1,220 (consisting of P&I of $920 and escrows, including MIP, of $300). The financial analysis reveals that the mortgagor’s gross monthly income is $3,500 and the total monthly other recurring debt payments are $800. >>
>>
In order to fulfill the 31% Front End Ratio requirement, the mortgagor(s) total monthly mortgage payment would have to be reduced to $1,085 ($3,500 x 31%). Therefore, P&I would have to be reduced to $785 ($1,085 total monthly mortgage payment less $300 escrow and MIP). Assuming that the loan modification will have an interest rate of 6% and a P&I of $785, the new mortgage amount would have to be $130,931, resulting in a principal reduction of $19,069 ($150,000 unpaid principal balance less $130,931). In this example, the mortgagor’s Back End ratio is 53.9% ($1,885/$3,500), which satisfies the 55% Back End Ratio limitation. >>
>>
In this example, the maximum principal deferment is $41,340 (30% of $150,000, less the $3,660 delinquency, or $45,000 - $3,660). However, based on their gross income, mortgagor is eligible only for a principal deferment of $19,069 plus $3,660 arrearages (which would include any foreclosure costs incurred to that point, in accord with Mortgagee Letter 2008-21) for the total Partial Claim of $22,729.>>
>>

[phones772]

Baretta were you at all in a deficit, and was your loan with BOA? How long did it take for you to get pre-approve?

[ama125]

Originally Posted by baretta

Phones772-
You HAVE to use this example, it is the only way I could figure out if I qualified for the FHA HAMP or not, and I just got pre-qualified today! Just plug in your own numbers! For the interest rate find the current Fannie Mae rate round down 1/8 of a percent (.125) and then add .5 pts. Let me know if you need help and I will try to explain better! Good luck!

Baretta - it warms my heart to see 1. how well you have educated yourself on this, 2. how much you have shared this new found knowledge to help others like yourself, and 3. to see that you have gotten pre-approved! You emailed me for help only last month. I must tell you that you were actually the first person to do so! It makes me feel good to see that you have made it this far. I can only hope to see some closure for you so that you can move on with your life and put this all to rest. I, too, am in that pre-approved stage waiting for paperwork (for regular HAMP, not FHA). Want to race? LOL!

[baretta]

Now the waiting game begins. I am especially worried about 2 things 1. will they count by student loans that are in forbearance towards my back end DTI and 2. If I have other liens on my house from creditors wil that "dis-pre-qualify" me or will I be given the period of time during the trial mod to get those taken care of so that the title is clean come time for the final mod? Any thoughts? On the paperwork they do ask if there are other liens so I am hoping it is not a deal killer. I am supposed to know right around Christmas...what a time!

[brasscupcakes]

Baretta said:

On the paperwork they do ask if there are other liens so I am hoping it is not a deal killer.

Please be careful, my friend. Crunch the Hamp eligibility numbers and solicit the more expert members in here before paying anything off.

When I first applied for modification with WaMu/Chase, I had a federal tax lien of $130,000 against my house. I thought, oh, no, better clear it, so I rushed to file back taxes, the IRS agreed I didn't owe them anything, this lien was removed.
Although I made every trial mod payment and they had all my paperwork, I found out Tuesday before Thanksgiving I got turned down on Nov. 11th due to having too much equity.
I am still being considered for an in-house mod (I've got boatloads of documented hardship) but somebody on the Chase executive team told me equity can really kill the deal, in terms of meeting investor criteria.
(My loan is owned by Fannie Mae -- I'm still trying to find out if this is true).

Again, get better advice than I can give -- but my gut feeling, without knowing what you'll be told, is that the less profit the bank can make by foreclosing, the better your chances of getting a mod.

Clearing those liens might just make you riper for plucking.

all best!

[baretta]

Anyone ever heard of the negotiator Crystal Smith? I was just pawned off to her from Amy Deaton. I get the feeling she is just in the regular loss mit dept when before I was dealing with the OOP. I mailed back the signed paperwork for my pre-qual on the FHA HAMP Friday and yesterday my account status said my workout assistance had been cancelled due to not qualifying. I sent Amy an email and she had Crystal (my new negotiator) call me. She was nice and told me it was a mistake and they would correct it and that I was still being reviewed, however the account status is still unchanged. She said that they will not count my student loans towards the back end DTI and that I will be able to take care of the other liens during the trial mod period which is good. Now I am supposed to hear back on Thursday.

[phones772]

Hello Baretta, I am in the review process for the FHA-HAMP, I have a furniture store card that I have not been paying because the payments were too high, my minimum payments is 363.00, but since I did not pay since June my minimum is hsowing on my statement as 2100.00, do you know what amoount they would use as my minimum? Thanks I appreciate your feedback.

[baretta]

phones772-
Since I don't have credit cards I am not too sure. My guess would be the $363. Also if you are not paying them they MAY not count them. I have TONS of student loan debt but I am not paying them right now and they said they wouldn't count them. Do you have a negotiator? I would be frank with them and ask them all the questions you have. I drove mine crazy but she was actually pretty nice, responsive and timely. Explain the situation to them. Good luck!

[phones772]

Who was your negotiator? And how long did it take for them to review you for the HAMP?

[baretta]

originally it was Amy Deaton and now it is Crystal Smith. You have to 1st be turned down for the other 3 loss mit options FHA has before they will review you FHA HAMP.

[phones772]

Do I need to be turned down for all three Special Forbearance, Modification, and a Partial Claim or just one out of the three? Please let me know because I was turned down for the modification, they never offered me special forebearance, but they put me in for a partial claim and i denied it becuase it was only bringing me current, and payments would stay the same, which I cannot afford my current payments.