Pre qualified with BOA...and $700 deficit

[nygirl07]

We applied for a loan modification and the paper work we sent in we thought showed a $150 surplus which is what I thought they wanted. Well we got pre qualifed and they told us we would get sent a leter saying that we were pre qualified.

I got the letter yesterday and it says that after reviewing our information it was determined that we had a monthly deficity in the amount of $694.40 and that we were pre qualified for the makin homes affordable modification program and would be hearing from a representative for final review.

First, is that good or bad? and second is having a deficit like that going to be bad? I don't know how the came up with it but assuming they did they pre qualifed us so I guess it's not too bad right?

[Medora]

Hi NYgirl,
Going thru my own BofA nightmare! I've changed my financials so many times trying to figure it out. What's interesting is that most of time, the number the reps use is DIFFERENT then the amounts we gave! In some cases I think the reps may be trying to help?
Yesterday one of the reps told me that for living expenses, they have 3 catergories--low, medium and high. They ask you for your number, then enter the one that's closest to the category! So for example I said living expenses were $2200 for 2 people, and she said, "You mean $1750?" Like, whatever...
Finally got prequalified for the 3rd time this morning and have to fax in all the paperwork... and now I can't even remember the number that the rep used!
She said though that we were positive $1100 (would it were so!), I didn't argue because, hey, she said we prequalified.
My understanding was that the rule of thumb is to be +/- $500 before modification w/ a DTI of 40-65%. DTI, in case you are wondering is your recurring debt payments (mortgage, cc's, etc) divided by your Net Income.
Then again, everyone seems to be different. We kept getting turned down in pre-qual with a DTI of 45% and good net income, so go figure!!
Good luck to you and do keep us posted.

[nygirl07]

Thanks for responding....I kept looking at the stuff we faxed her and had no clue how she came up with a deficit of that much but maybe she did that for a reason. I went the fast route and emailed a BOA executive and heard back within days. Now that I'm pre-qualifed I'm curious what's going to happen next...Where are you in that stage?

[bittersweetme]

NYGirl,

When did you start your process ?

[Medora]

Hi NY,
Well we got pre-qualified in April, then rejected because the rep posted the wrong Net Income... Resubmitted but couldn't get through pre-qual this time! A smart rep found that there were lingering computer codes on my file that caused the automatic rejections. Resubmitted and go prequaled for tacking arrears onto principal but not other programs. Ok, sent in some good faith $, they rec'd it on 7/22...the same day they cancelled our mod. Oh boy!
Turns out we didn't return one of the automated messages (like, we don't get those all day long every day?) and our file was just automatically cancelled. I only found out by accident while speaking to cust. svc. about the prop taxes. Yikes!
Yesterday tried to pre-qual again, kept getting rejected again even though we pre-qualified just 2 weeks ago! No one would help.
Didn't sleep, called at 8am, got very lucky to get an experienced rep who told me that the arrears have to be less than $25000 to qualify. A-ha! She told the computer we had enough to make that true, presto! We're pre qualified again.
Faxing my papers in today and holding my breath!
Hopefully will get some sleep tonight too!
Sorry to be so longwinded... but you asked! :-)

[nygirl07]

Medora: I didn't understand what you meant when you said "the arrears have to be less than $25000 to qualify" I'm not sure if there was a mispelling

Oh and I only applied about 3 weeks ago and go prequalified last monday so the whole process of getting pre qualified only took me a week and a half.

Do you think I can still get a modification with a deficit like that?

[Medora]

Hi NY,
Let me try and clarify: I was told that since I was 11 months in arrears, and the amount I was behind was now over $25,000, I kept getting rejected in pre-qualification. I've now heard that some people did get approved with larger arrears, but this just happened to me last night, and when the amount was brought lower by my promise to pay $3500, it sailed through the prequal. Maybe it's calculated as a percentage of the mortgage rather than a flat number, I don't know. But that's what happened.
Now about your case--and you know, I'm just speaking from experience here and what I've learned--we were originally pre-qualed with a $650 deficit, but then got rejected because of lack of income, i.e. our DTI was too high. We had to start over. The first thing I would look at is how you came up with your calculation of a $150 surplus--did you include everything that's on your credit report? Did you include property taxes in your expenses? Did you do your calculations using Gross or Net income (we got tripped up on this one).
There's no telling if you'll get modified, but one thing I've learned is if you get rejected, crunch your numbers and submit again immediately. It's not the end, just keep trying. But being really clear on your numbers is useful going forward, and you can always come back with lower expenses by making cutbacks.
Hope this info helps, and remember, to not get freaked out if it doesn't go smoothly the first time. Most of us on this forum have been through it more than once!

[nygirl07]

When I came up with the our surplus I added every monthly expense including food, CC bills, mortgage, taxes, insurances. The only reason I could think of that they came up with it is that they averaged our income. My fiancee is self employeed and his month income was different every month and varied up and down around $500 so they may have averaged it out.

They pre qualified us with this deficit so I guess it's not too bad. Now that we are prequalifed do you know what they will do next? We were told we would hear from some one in a few weeks so what will that person do if we already sent them all of our info?

[Medora]

Hi,
Your credit card bills are part of you DEBt. Debt=mortgage and escrowed insurance/prop taxes+cc payments on revolving accounts+student loans+car payments, etc. Your DEBT is divided by your NET income to come up with your DTI. Still, given what you say, it doesn't make a lot of sense.
We're self-employed, too, and it was really hard to get clarification on income. Both reps I spoke with today said averaging it out over the past six months (which is what they do in Bankruptcy court) was perfect. It's good to explain that method when you submit, too.
As for when they'll contact you, it seems to average 2-4 weeks but sometimes they don't call you, just send you an offer in the mail, from what I understand. It is critical to follow up yourself on at least a weekly basis, just to make sure there are no new notes on your file such as, "Need newest bank statement."
We blew it last time because we didnt' respond to an automated voice message, whcih we assumed was our daily collections call. They only gave us 2 days to get back to them, then they cancelled our mod and now we're starting over again (3rd time).
These are just lessons learned from war... the hardest part is not worrying about it.
Just be grateful you have someone by your side... congratulations on your pending nuptials!!