Bank of America-H4H or modification?

[rk123]

Hi,
I am here to help my parents. Here is situation;
Bought house in 2004, Refinanced with bank of America in 2006,
478,000 @ 6.25 % FIXED, NET 5, fixed for five years and then adjusts, paying almost $2500( interest only). Not escrowed
LOC, 60,000, not fixed paying current rate of 4.5/5 %, used for repairs, consolidate credit card debt, family expenses.
House current vale is not more than 360,000.
They are behind in mortgage due to combination of many things, mainly loss of income dad is not making much due to economy(Cab driver, no passengers any more, not eligible for any other job based on health, age, and education. Also he can not work any more as he used to because both my mom and dad has a big responsibility, that is my severely mentally and physically challenged brother, who is totally dependent on them, needs 24/7 protective supervision, mom is her paid care taker, dad is unpaid,brother is an adult. They have hard time paying since a year now but they were current on payments as other adult children who lived with them payed them. One of them lost job, one moved out. So make it short they were already hand to mouth and now behind, even with help.

They both only make $2500/month nowadays, help from adult household is $1500 which includes SSI for son, together is $4000/month, while expenses for a household are $6700 that include $3121 for house related expenses e.g insurance, tax, mortgage and $3500 for living expenses and credit bills, utilities They are 40 days late and bank told that they are not eligible for
payment plan. Received loss mitig. dept. latter to send income proof etc. in order to get options.
They can not afford current payments but can not afford to loose their home either as no body is going to rent them with the son, actually they bought this house as former apt. kicked them out due to son.
What re suggestions, I think they are not eligible for loan modification as their personal income even don`t cover even mortgage. Also can they count the above mentioned income into paperwork which needs to be sent out.
H4H only works if lender is willing to release with loss, not sure about BOA at this point about this option, also based on their income do they qualify for H4H, plz help me where to start.
I already signed with NACA workshop but it is way far on 3/7/09, might be too late, before that even no counseling provided.
HOPE-995, called them, just a money management company rep, want to go through all financials and submit paperwork for modification, I never went through as I personally don`t believe them. My thinkings were confirmed by some posts on this forum afterwards.
Gurus, plz help us.

[Moe Bedard]

Hi rk123,


Welcome to the forum and thank you for joining.............

If they have received a Notice Of Default you should be able to contact NACA immediately............they normally will begin with the phone consult and allow you to submit the paperwork and if the workshop is too far........they will be able to do the phone consult alone..............
click on the link for the correct start point and call them directly.......
https://www.naca.com/refinance/refinanceTenStep.jsp

[rk123]

Hi ***,

They have not received any NOD yet as they are only 47 days late as of today. NACA can not help them yet but they have sent to BOA hardship letter and proof of income.
For loan modification how much they can be short and eligible for mod. Can they show income of adult household not on loan/title.
They have been living with that income but hand to mouth and still end up using cards.
Lets say all household income (including non borrowers, adult children) exactly equals the expenses, are they eligible for mod.
Can bank allow to count this income as bank might still think what if any of these non borrowers move out.
In this situation can bank refer them to H4H.
Plz. advise as I don`t know which income should be included.
I want them to afford their home on their personnel income, so that they do not end up in default when the household members move out in future.

[Moe Bedard]

BofA ivestors are not participating in the H4H program.............

You would need to call BofA and ask them what they would require you to submit.............the criteria is different with each investor. They usually require all household income and all household expenses...........if your parents are showing a very large deficit.........they may get turned down for a modification..........but you will need to start the process to find out, they will let you know if this is the case...........then you can resubmit the financials using the other income.

BofA Loss Mitigation
1-800-936-6362

[HopingtoFind]

We have been working with BofA on several of our loans.... I understood from talking to several analysts is that you would need to have a small deficit to be approved for modification. If you have a big deficit they will not consider you.... BofA wants to see a surplus after modification..

[rk123]

Thanks *** and HopingtoFind for your reply.
I will update with process.

[rk123]

For new reader of this post my parents are already 90 days late.After sending the hardship letter and income/expenses etc, asked three times for update, every time the rep told she/he going to assign a counselor as every thing needed is in system(I think they wanted me to call to request for counslor, strange), guess what they never assigned one actually. At last one assigned for sure just a week/two ago. Asked to wait another four weeks for his call.
Surprisingly got a call tonight from BOA collections dept., that there is a deficit of 3100, no way for modification, collection rep said that our file is withdrawn from loss mit.department(letter is in mail), but no counselor even called or discussed any thing. Even collections dept. made only 3 calls in three month.
In short theyy have asked for updating income/expenses as the rep told that we can include income of disabled son(SSI) or any other household member even they are not on loan to make up deficit.

Now question how this income /deficit woks, I can not underdstand this if there is no deficit why the bank would consider for modification. how much deficit is allowed. We have cut back on expenses in these month( as the whole nation is forced to) sold car etc. will add non borrowers income(not much), only part time now).Look like there is going to be a decrease in deficit, but in reality even if there is no apparent deficit, what if any of these non borrowers move out that is also a reason for a request for modification, a loan parents can afford on their own with son`s SSI.
Can any body plz. tell how much deficit can some one have and still be eligible. Is it true there should be no deficit(income and expenses should exactly same). If so how the investor figures how much they should reduce. My parents pay taxes, insurance separatly, currently have 6.25% fixed for untill two more years.
Not at default with line of credit with BOA(3.25%).
Late with big loan(480,000) that is with BOA, private investor.
Plz, plz post reply soon.

[Moe Bedard]

If they are allowing you to send in the additional household income to take away most of the deficit...............then try to do that and see if they can help you then.

[rk123]

Thanks for a quick reply ***. Can you please explain a bit why they don`t want to see a deficit and why they will modify loan if there is no deficit. To me it looks no deficit- no hardship, as income expenses equal, in reality it is hand to mouth, dragging to ends meet, credit cards being used.
Can you please explain how it works.

[Moe Bedard]

Actually that isn't the case with a large deficit...................they want to make sure that you can afford the house and expenses.............not just the mortgage alone...............

For instance..............if the deficit were already $1000 and the modification were only able to drop the payment by $500..........you wouldn't be able to afford the home even with a modification because there would still be a deficit of $500 at the end of every month..........so they won't approve a modification in this case.

But if the deficit were $300 and the modification dropped the payment $500..............in this scenario the modification would help because there would be a surplus of $200 left at the end of every month.

[rk123]

I think I can call it a success. Praises and thanks to God, I got this mod. packet today for my parents. Only requested mod. for first loan and they got this offer;

For five years: New principal and interest= $1590(2.35%)-reduced from interest only of $2500(6.25%).
Afterwards until maturity Principal and Interest = $2661(6.25%)

***, can you plz. comment on above mod. and also do you think I should try to fix for longer term then five years as I am looking for a long term mod. that they can afford without household income after five years, to avoid any future problem and get a security for long time for them and disabled dependent brother.

Really helpful website, keep it up.May God Help all in need and those in process of modification.

[LHarveyMadman]

That is a very good modification, and very much in line with what I and others have received from Bank of America. All of us got low rate for five years, with a return to our original (but still reasonable) interest rates. Your starting interest rate, incidentally, is considerably lower than what other B of A customers have gotten.

This sounds like a standard modification structure from B of A. I don't think you'll be able to extend it for longer, but it doesn't hurt to try. Just don't let this one slip away in the hopes of getting something better.

Congratulations!

[rk123]

LaHarveyMadman,

My happiness is turned down as a mistake was made in papers. They were signed wrong, mean not exactly as printed full name but instead as my dad normally sign only middle and last name(he did exactly same for these mod. docs too and to add pain signed in blue(asked was black only). Notary person say fine but instruction are strict. Called Bank and they say you might have to start process all over AGAIN, means apply for mod. again as they can not send new papers there is a limit of 15 days to send and receive them before the expiration of deadline for signing the docs.I am torn apart. I have sent the papers any ways.
plz. comment and also we can freeze credit reporting.

[rk123]

I meant to say how which number to call to ask for freeze on credit reporting until all is settled. Plz. comment on previous e-mail as I am so frustrated at this point.

[LHarveyMadman]

Sorry to hear about the signature problem. I can't understand why the notary didn't tell him to use a black pen when he signed. Also, B of A should have sent three copies, only two of which have to be sent back. Once the first copy was botched, the notary should have stopped him from signing another one until a proper pen was found.

The fact that you have to sign exactly as your name appears on the document is also annoying, and doesn't make sense if it's not the way you usually sign your stuff. I didn't think it was strictly enforced so long as your identity is verified by the notary.

Lastly, I find B of A's statement that you might have to start all over is strange. It's not hard to resend the documents, but I know it takes time for this to happen.

[LHarveyMadman]

Oh, to request an extension of the credit reporting freeze, just call the loss mitigation number - 800-846-2222.

[rk123]

Mailed signed docs. on last Friday, bank accepted them as of April 1st, told that should make payment as accepted in documents. Now I must say thanks to all who replied to my posts and moderators of this wonderful forum, thank you so much.
Lesson learned, never give up hope. Although as discussed in previous posts, the bank rep. gave wrong info. i.e. not to send signed docs.(mistake signed in blue ink), he told me that you made mistake, start over the modification all over again. He gave wrong info, either due to lack of knowledge or on purpose(may call it jealousy)which could have cost us in cancellation of modification offer if docs were not sent on time by deadline.

Thanks to God above all, with whose help my parents and their dependent disabled son can afford to live in a place that is called Home Sweet Home .

[laamim]

congratulation!!!!

i have one question, what was the amount you gave them for your deficit before you were approved...thanks

[rk123]

laamim,

The deficit of my parents was way too high but with household income counted(adult Children) and expenses cut back, it came up to be $600/700, that`s what I have in my paperwork, not sure if bank have different formula.
May God help all those in need of saving their home(AMEN)