Loan mod - combining first and heloc with bank of america?

[BofAhelpneeded]

I'm so glad to have found this great site.

Situation:
1st mortgage = 239k current balance, 30 yr. fixed @5.375%
2nd mortgage = home equity line of credit, interest only 260k current balance, adjustable (2.99% now)

Purchased home for 330k, value went up to high 600k, now valued at 455k

We have a monthly deficit now in our budget due to several things including loss of a second income, rising real estate taxes, rising household expenses and paying off some debts for a family member. We are not behind and have managed to always stay afloat using our home equity line and credit cards to make up any shortgages. We will sell the house if we can get enough to cover the mortgages. But we would like to propose a modification to Bank of America. BOTH of our loans are through Bank of America.

We will NOT be able to pay both mortgages when the interest only home equity line adjusts.

Questions:

If we offer a proposal to combine both mortgages into one 30 year fixed at say 350k and forgive the rest is that reasonable?

Would we have a better chance at dealing with them separately or asking for them to be combined into one?

How do we go about submitting our request? I have read that a few here have sent email requests...if we go that route do we include financials?

Is there a sample of all of this anywhere? I have found hardship letter samples but not samples of how the financial info should look.

I have read that the monthly shortage should not be too high. Is a $200-300 a month shortgage good?

Thanks in advance for any and all advice.

[BofAhelpneeded]

I am putting together a loan modification proposal. After reading tons of threads here I'm confused as to which option is better - going through NACA or emailing the high level execs? My loans are with Bank of America.

[BofAhelpneeded]

I went to Naca to register and you have to sign a lengthly agreement and it talks about all types of membership fees. I thought it was free?

[Moe Bedard]

Hi BofAhelpneeded,



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

You wouldn't put together a loan mod proposal...........the investor on your loan is the one that offers that to you after meeting the eligibility requirements for a modification and submitting the necessary documents for verification..........they are following certain guidelines that are put in place for the Making Home Affordable modification program and you would need to meet the criteria to be eligible for this program.................

You would first need to put together a hardship letter........

These are what most lenders consider to be generally acceptable hardships....

1. Loss of job or reduction in income
2. Death of the homeowner, spouse or family member
3. Illness of homeowner or family member
4. Divorce or separation
5. Forced job relocation by employer
6. Adjustable rate reset-payment shock

The best way to set up a hardship letter..........

* First, describe the hardship and the circumstances that caused it
* Explain what steps have been taken to correct the situation
* Provide the lender with your plan to get back on track and stay there
* Assure the lender that you are a responsible homeowner who just needs a second chance and that you are very motivated to save your home.



The contact information, process needed to get started, for the program through BofA and to see if you are eligible can be found here in this link.............
Bank of America continues to lend and invest



With both of the loans being with BofA............you may want to work with them first to see what the options are going to be from the investors on these loans first.............

[Moe Bedard]

NACA modification services are free..............

Given the current mortgage crisis NACA has suspended any Membership Fee for Home Save participants. In addition, NACA will pay for accessing your credit reports.

https://www.naca.com/refinance/refinanceTenStep.jsp



Please keep all questions and updates here in your original thread........it makes it easier to answer them and to follow the story in one place.

[BofAhelpneeded]

Hi ***. Thank you so much for your reply. I had read that a few people here suggested a certain "deal" to the bank rather than just asking for a modification.

Do all modifications now have to fall under the Obama criteria? Can you still get a modification whatever way it was done before the Obama plan?

[Moe Bedard]

the only time they will look outside of the plan is if you do not qualify for the plan............but otherwise this is the guidelines they are following.

[BofAhelpneeded]

I'm so confused. I called Bank of America and they said I have to call PHH Mortgage for my first mortgage?? They are my servicer. Does that sound right?

I don't qualify under the new Home Affordable Plan but they said I could contact the loan modification dept. anyway because it doesn't mean they can't do a loan mod.

My second mortgage is with BofA even though the woman I spoke to couldn't not find it. So is there another telephone number that I can contact for a BofA loan mod....not the number that directly deals with the Home Affordable Plan?

[Moe Bedard]

Who do you send the payments to on the first, BofA?


try contacting loss mitigation
1-800-936-6362

[BofAhelpneeded]

The first payments go to PHH mortgage.

[BofAhelpneeded]

I obviously have no idea what I am doing. Can NACA help me with trying to get a modification for both my first AND my heloc?

[Moe Bedard]

If this is the only property that you own............they may be able to help with the first............but I am not sure that they would be able to do a workout on a HELOC...........you would have to check with the counselor on that one..........

https://www.naca.com/refinance/refinanceTenStep.jsp

[BofAhelpneeded]

Thanks ***. We took out our original mortgage with Bank of America but our payment book says PHH Mortgage and I think the mortgage is a Fannie so which one do I contact for a modification?

[Moe Bedard]

The one who is servicing the loan and you are sending the payments to........

[BofAhelpneeded]

Update: I spoke to the Loss Mitigation department at Bank of America regarding my home equity line. The woman said to call back with all of my income and financial info including the amount of my 1st mortgage and value of my house and they would approve or deny me right on the phone. I asked what type of options they have and she said they have a few new programs where they can reduce your rate or reduce your payment and put your entire payment toward principal for between 2-5 years. This would be HUGE for us since our heloc is interest only. I'm so nervous to call back. Does anyone know what type of numbers they would be looking for? A big shortgage? A small shortage? A small monthly excess? She said to include EVERYTHING ... food, gas, spending, everything. Any and all who can chime in to help on this...I would greatly appreciate it.

[LHarveyMadman]

HopingtoFind and at least one other person here had their interest rate on the HELOC reduced to almost 0% for a couple years. As I recall, Hoping initially got a rate reduction for 1 year, but then she was able to extend it to 2 years.

The interest rates on both your loans are excellent, though interest rates on first mortgages are better than what you currently have. You might be able to negotiate a temporary reduction in interest rate for your first, but the impact in terms of reduced payments might not be that dramatic for you. The HELOC rate cannot get better through conventional means (i.e. the Fed is not able to reduce the discount rate any more), and the futures markets are not predicting an increase in interest rate through the end of the year at least, and possibly not until sometime in 2010. So you should have some security for now in knowing that your interest rates should not be increasing any time soon.

[Moe Bedard]

You would need to give an accurate picture of your financial situation..........not someone elses.............otherwise you will get a workout that will not reflect your financial hardship accurately.

[BofAhelpneeded]

Thanks *** - I do realize that but I read many posts here where people said that they were denied either b/c their shortgage was too big or too small and they adjusted the numbers and reapplied and were approval so that is the info I was looking for.

[BofAhelpneeded]

Hi - I need some help. I just received an offer of 0% interest for 2 years on my interest only home equity line of credit. I just heard this week that the Obama plan will now include second mortgages. Is it possible that I could get a better deal through the new plan? I'm trying to read up on it but can't figure it out.

Ideally we want to combine our first and second into a fixed mortgage. We need to get out of the interest only second somehow. If we take this offer does that mean we can't apply for any other plans?

[HopingtoFind]

I don't believe I have seen anything about combining 1st and 2nd in the new Obama plan, although I heard that they will "do something" with the 2nd once the 1st is modified. What that could mean is possibly principal reduction or forebearance... I really do not know too much about it.

As far as whether or not your should accept an offer that was made to you... I would suggest calling BofA and asking them if taking their offer would preclude you from applying for a new plan... my guess is that it wouldn't, but I would double check.