Pre qualified with BOA....What to expect next?

[nygirl07]

We applied for a loan modification through BOA and got preapproved today...I was told that they are still working on thows who are behind in their payments first and then we would hear from someone..she said most likely before our next payment is due. We are current on our payment and she said to try to keep current.

What should I expect next? If we were pre qualified does that mean that they are going to do something? We really need this with my loss of income and my fiancee's business loosing income due to the economy

[Moe Bedard]

Hello NY Girl and thanks for joining the community!

Well, hopefully this is good news for you and things go like just as she explained. But unfortunately we don't live in such a perfect loan modification world where everything goes so smooth. I say this to prepare you for the worse. You have to have that attitude and plan because I have seen the worse way toooooooooo many times to be optimistic when I see a post like this.

The key issue that I see you may have is that you are current. Yes, under the Obama plan, homeowners that are current can still get help, but this is 100%voluntary and it is up to the servicer to decide. The decisions that I have seen more often than not are denials for people who are current.

I am not saying to be late. That is a decision you must make after you see what happens or realize that maybe I am right. Their job is to get their money, not help people. If they fix everyones loan that is not late, they would be out of business.

They don't say any of this, but this is the truth.

[Moe Bedard]

Oh, you can also try a non profit like www.NACA.com or www.995hope.org 888-995-HOPE for help.

[luvmyhorse]

Will giving your loan information to NACA or Hope.org hurt your credit?

Also does anyone know why they ask for adjusted gross income? Will they rule you out if you are a small business owner with too many deductions? Is it worth waiting until next year and file with no deductions?

[Moe Bedard]

Originally Posted by luvmyhorse

Will giving your loan information to NACA or Hope.org hurt your credit?

Also does anyone know why they ask for adjusted gross income? Will they rule you out if you are a small business owner with too many deductions? Is it worth waiting until next year and file with no deductions?

It will not hurt your credit to give your info to them.

They want you actual income and not gross, that is why they ask for that. It may be worth it. Especially if there is no income after adjusted gross at this time.

[luvmyhorse]

Your answer is not clear to me. They want your net or adjusted gross? Or they want your gross?

[Murray12]

Moe- Is it really optional if the borrower isn't late yet? I think the banks are playing it like it is. The guidelines lay out a particular format to be used...

Reasonably Foreseeable (Imminent) Default
A borrower who is current, contacts the servicer for a modification, appears potentially eligible for a modification, and has suffered an eligible hardship (as described above) must be evaluated using the imminent default screen set forth below. This screen must also be used to evaluate such borrowers who are in default but less than 30 days delinquent.
Evaluating the Borrower’s Financial Condition and Property Condition to Determine if Default is Imminent
For borrowers who must be evaluated using the imminent default screen, the servicer must evaluate the borrower’s financial condition in light of the borrower’s hardship, as well as the condition of and circumstances affecting the property securing the mortgage loan. The servicer must make a determination of whether the borrower satisfies the following imminent default screen:

The borrower’s debt coverage ratio is less than 1.20. The debt coverage ratio is the borrower’s monthly disposable net income divided by the borrower’s current monthly principal and interest payment on the first lien mortgage loan (excluding tax and insurance payments). Monthly disposable net income is the borrower’s monthly gross income less (1) monthly payroll deductions, (2) monthly escrow allocations of property taxes, property insurance and mortgage insurance premiums, (3) monthly homeowner’s or condominium association fees, (4) monthly allocations of all other monthly credit
Announcement 09-05R Page 5
obligations, (5) all other reasonable living expenses allocated monthly, and (6) any other monthly net negative amounts paid or incurred by borrower (such as negative rental income, mortgage loan payments on investment properties); and

The borrower’s cash reserves are less than three times the current monthly mortgage payment, including tax and insurance payments (using estimated payments if the mortgage loan is not currently escrowed). Cash reserves are liquid assets the borrower has available for withdrawal from any financial institution or brokerage firm, including checking and savings accounts, certificates of deposit (even if held for an extended time), mutual funds, money market funds, stocks or bonds.
Servicers must obtain a completed Borrower’s Financial Statement (Fannie Mae Form 1020 or 1020S) from the borrower(s) to evaluate the borrower’s financial condition in determining whether the borrower satisfies the imminent default screen, and must also obtain a current credit report for the borrower(s) to validate and supplement the borrower’s information. As an alternative, the servicer may customize a financial form using its own letterhead so long as it collects the same information, or it may use Freddie Mac Form 1126, Borrower Financial Information. The servicer should request such other documents from borrower(s) as deemed necessary to evaluate the borrower’s financial condition.