We were moments away from filing Chapter 7 (to relieve$100K of dept) when we received a $199K forgiveness letter from BoA as part ofthe Dept. of Justice program. Now the game has changed.....Need information tostrategize my next move.
Details on our house story:
Owe $382K on first + $199K second-both BofA loans (home value fluctuates frommid-$300K to $500K
Stopped payments both 1st and 2nd on Jan. 2011
Applied for HAMP-later denied
Applied for DofJ Loan Mod
Approved for DofJ loan mod JUly 2012.
Trail payments roughly $500 per month HIGHER than before...not happy*
Made first payment Aug. 2012 (financial struggle to pay-considering if we wantto keep house?)
*Our DofJ payment is $3500 per month. This is $1050 more than we used to pay.It now includes insurance and taxes (we used to pay separately). So it is stillabout $450-$500 more a month that we paid before. I am confused how they cameup with this trail payment amount??
BACKSTORY ON INCOME: My husband works for the government (Fire Service) andtook a 10% pay cut 1 years ago. He has been force hired to work several shiftsof overtime during last spring (falsely raised our income?? If so we can get a letter from the City explaining temp increase and ask for them to consider our TRUE income) We also made moremoney last year before the cuts (do underwriters base income on last yearstaxes?) We also own a vacation home that we rent out as a side business (Maybethey included the income from this business and didn't consider the expenses?Since it is often a monthly loss-not income ) Basically our monthly trailpayment is 50%+ of our monthly net income. Our home was appraised at $340Krecently. We had recently decided to walk away and rent (an ocean view homewould be less than the trail payments on our $300K underwater place).
But we really wanted to know what is behind 'Door number 3' with the loan modification.So we have made 2 of the trail payments. The whole time we have wondered 'couldit be that the trail payment that is offered may be more than our final paymentwill be?' 'Could it be that they offer us a 15 year plan with 2% interest andwe could pay off the house sooner?' We have no idea, but decide to keep'rolling the dice'. Then the Fed Ex package arrived with the $199K forgiveness.
Problem: If we don't file Chapter 7 BEFORE the loan modification goes through,we will not qualify and will have to file Chapter 13 (we need the late paymentsto raise the pay off amount to qualify.....so we really want to file 7 NOW.Anyone know how I can clarify what will happen to Dof J loan modification if Ifile now? My attorney has no idea either and is trying to contact BofA bankruptcydept. for details.
Bottom line questions:
1) Will filing BK during DofJ loan modification change the plan in progress?
2) Is the trial period payment the same as the final payment?
3) Can the financials be re-considered if there has been a change since the initial application for DofJ?
4) How do the underwriters come up with such a high payment?