Bank of America loan mod -SUCCESS!!

[LHarveyMadman]

Woodland Hills Worrier,

With regard to the CA AG settlement with CW/B of A, I don't know the specific details of the program. Since I had B of A as my lender (i.e. it wasn't a CW loan that was absorbed by B of A in the takeover), this agreement didn't apply to my situation.

I have a friend in a similar situation to you - SoCal, bought in the late 90s, refinanced in late 2005 (and took out a hefty chunk of cash in the refi), and has now lost most or her previous equity. She isn't facing any financial difficulties, but did look into a refi/mod when she saw where the credit markets were going. I don't know who her lender is.

One question that came up in the process was: when you did the cash-out refinance, what did you do with all that money? I don't know what she told them, and I didn't ask what she actually did with that cash, but she told me that her answer was apparently not acceptable to the lender and they wouldn't move forward with the modification.

I don't know if your story is similar, but if it is, you might want to be ready with a plausible (and verifiable) answer that would support your case.

Keep in mind that if CW starts considering giving you a modification, they are also going to look to see if you can afford the loan after the modification. With an impressive monthly net of $11k, one would surmise that you should be able to afford a mortgage. You mentioned, however, that you are in a negative amortization situation with a number of other debts. You probably should also be prepared to show how you are going to take steps to reduce your monthly expenses and thereby reduce the likelihood of default. Recent reports have indicated that over 50% of borrowers who received modifications are delinquent again within 6 months, so if it appears to CW that you could fall into this category, they might be disinclined to modify your loan.

Good luck. As was already recommended, you should probably start a new thread in the CW forum. To get to most specific feedback, you should probably include information such as loan balance, home value, current mortgage terms, second lien obligations, etc.

[Woodland Hills Worrier]

Not sure how to work this system yet. I was struck by similarities between your situation and my own and already posted to this thread but was advised to start my own thread. My loan is Countrywide which may make a difference. but probably not as they are now one and the same. Would like to follow your strategies. Also, do you have an opinion or any thoughts on what Obama administration will be announcing regarding foreclosure crisis?

[Woodland Hills Worrier]

LHarvey Madman, just reviewed your post. Thanks for the info. I sent off pay stubs and a letter yesterday to Countrywide Home Retention. Regarding the re-fi in 2006 we put most of the money into home improvement and re-structuring debt. Neg. Am payments were part of plan to reduce debt and prepare ground work for refinancing Jan 2009. I calculate another year or so before I hit 115% of loan and am forced into full payment. Wonder what strategy is best. Meanwhile waiting to hear what Obama is planning to do. Will bankruptcy judges be able to adjust prinicipal. That would be my biggest hope. That way I could possibly deal with 2nd home improvement mortgage. I know it is very difficulty to predictd the future, but it seems something must be done on a national level without the control of the bankers or things will soon be beyond control.

[LHarveyMadman]

I don't think anyone knows - not even Obama himself - what he will do to try to ease the burden to distressed borrowers. He's facing an increasingly skeptical public; witness the national sentiment regarding the U.S. automakers, where a large proportion of Americans felt that the automakers deserved to fail and should not receive government aid. There are many out there that feel that some borrowers deserve to be hung out to dry.

This credit crisis was developing for a long time, and it's not going to get solved by some executive order or act of Congress. Keep in mind, that whether they are willing to admit their share of responsibility, the Democrats helped fuel this crisis by pressing FNMA deeper into the subprime market (with the intention of promoting minority and low-income home ownership) and resisting calls for greater legislation in the early 2000s. So, our new President might find himself stuck between a need to find potentially painful solutions and a desire to adhere to traditional Democratic principles. No, I am not absolving the Republicans of culpability - they had their chance to act in the early years of the Bush administration - I'm just saying that like a tree, this crisis has many roots.

Regardless of what can be accomplished in the early stages of the Obama administration, I fear that it may be too late for borrowers such as yourself. Any plan that is even remotely controversial will face resistance, if not from members of Congress then from special interest groups that could block its implementation. Some folks will not be able to find out where the dust will settle before losing their homes.

In your case, I again recommend that you post your story on the CW board; there aren't as many people lurking on the success thread. The more detailed you are about your situation - loan balances, terms, etc. - the more specific your feedback will be. It seems like the cash taken out in your refinance went to "legitimate" expenses (i.e. you didn't use it to buy Ferraris and yachts), so if the question arises (it may not), then you have a reasonable answer.

Remember also that you need to demonstrate to CW that you will be able to afford the modification if they offer one to you. You probably should come up with a debt reduction plan and budget, both to support your application for a modification and to improve your long-term financial security.

[shahb]

Hi LHarveyMadman
Can you please let me know, how long it took to get a response back from bofa after you emailed to the execs of bofA?
Alo, does any execs from bofA emailed /called you or some agent?

[LHarveyMadman]

I got a call back in about a week. I was contacted by a loss mitigation analyst, and also received a letter from a loss mitigation supervisor.

[shahb]

Thanks LHarveyMadman. That will give me a little relief. I will wait for a week and see how it goes. I will update the forum as soon as i hear back. Hope for the best. Thanks for the support. After reading your experience only I got encouragment to try again. Thanks.

[BofASucks]

Harvey, Did you have to be late in payments before they modified your loan? We're current and have been for the full two years we've been here. That's probably why they are blowing us off.

[LHarveyMadman]

No, I was not late at all when I requested a modification. After my modification was approved, I was told to stop making payments until the first date of my new payments.

[BofASucks]

Thanks, Harvey, for your quick response. We'll stay current then, rather than play games as some of the pinheads we talked to at B of A told us that they couldn't do anything for us until we were 90 days overdue. Sounds like they are setting a trap, doesn't it?

[LHarveyMadman]

The first few times I called (1-800-936-6362 and 1-800-846-2222), I was told the same thing - nothing could be done because I wasn't late. I don't think they're saying that with any malicious intent - this is simply what their utterly overworked ground-level analysts are told to say. Remember, they are receiving thousands of calls a day from people seeking modifications, and they're given certain criteria by which the calls are screened.

No, calling didn't work for me. I got my foot in the door by writing a polite, detailed email to select executives explaining my reasons for seeking a modification. That is what worked.

[Woodland Hills Worrier]

Somewhat off subject, but I am curious as to your opinion on the current debate regarding foreclosure and loan modification. Seems like they are putting some teeth or sweeting the carrot or getting a bigger stick, don't know how to put it, but does your reading of the current legislation look to you like the government is going to start using threat of bankrupticy court principal modification as a way to bring lenders to the table? Do you think the process is so complicated by servicers, investors, and bundled mortgage-back securities to allow any real reform to take place. Would appreciate you insight. Thanks.

[HopingtoFind]

I personally believe that there is going to be a lot more pressure on lenders to modify, reduce principle... etc. I think threat of bk will be used as leverage to bring lenders to the table... I don't see it any other way.

By the way LHarvey, I have a theory about you not having to be late in order to be modified while low level reps are telling others that they have to be late. I think the negotiator you worked with simply simulated you being late by letting you not pay for couple of months while freezing your credit reporting.. I would bet that your investor is either Fannie or Freddie... It would be interesting to find out...
The reason I think that is that is exactly what is happening with my Chase/Freddie mod...

[Moe Bedard]

The investor would be neither Fannie or Freddie.............his loan amount is too high................their limit is 417k.

[BofASucks]

Woodland: ""Somewhat off subject, but I am curious as to your opinion on the current debate regarding foreclosure and loan modification. Seems like they are putting some teeth or sweeting the carrot or getting a bigger stick, don't know how to put it, but does your reading of the current legislation look to you like the government is going to start using threat of bankrupticy court principal modification as a way to bring lenders to the table? Do you think the process is so complicated by servicers, investors, and bundled mortgage-back securities to allow any real reform to take place. Would appreciate you insight. Thanks.""

I wish I had some insight into this but my instincts tell me that just as they already have, the feds are going to help the banks and make noises about helping the taxpayer/consumer. BofA alone received something like $45,000,000,000 with no strings attached, ostensibly to help their mortgage customers but instead I think all they did was improve their 800-customer-dissuasion circle. When we finally did get a live person to talk to, the twit informed us that our only option was to refinance at an upfront cost of $12,000. I told her to kiss my @ss and hung up.

It's an atrocity but it has happened before in this country in 1907, when it was a massive foreclosure on farms and the banks ending up owning millions upon millions of acres of farm land. I'm cynical as hell and feel like the only way the consumer is going to succeed in getting a modification is to be the squeakiest wheel on the wagon. And even then it's a 50-50 chance.

If we can't get a modification and/or I can't get a job, we're going to have to let this house go back to B of A. I'm hoping that if the foreclosure spectre becomes to great, B of A and other banks will reconsider modifications. But I just don't know, and unfortunately I don't have great faith that Obama will do a damn thing, either. And I voted for him.

[LHarveyMadman]

HopingtoFind, I also wondered whether they intentionally made me late in order to push the modification through. However, I was told that my modification was already approved in late October, and they didn't "make me late" until mid-November. By that time, the ball was already rolling (verrrrrrry slooooooowly). So I don't think that's what happened.


Sorry, Hoping, here's a pet peeve alert: it's "principal" that needs to be lowered, not "principle". The lenders' principles are low enough as it is.

Second pet peeve alert: I really hate these smileys.

[Woodland Hills Worrier]

thanks for the responses. I was on hold at CW for 15 minutes before an operator told me that I would have to call back due to technical difficulties. She said the "technical difficulties" were the 500 other callers on hold with no reps to talk to them. I was hoping to find if CW held my first and 2nd mortgages or if they had bundled them off somewhere. Evidently a huge problem in the mod process is getting all the paperwork sorted out. It may be that becomes one of the reasons the government steps in and creates some kind of universal restructuring for all underwater loans. Am I dreaming or could that be true?

[LHarveyMadman]

Originally Posted by BofASucks

It's an atrocity but it has happened before in this country in 1907, when it was a massive foreclosure on farms and the banks ending up owning millions upon millions of acres of farm land.

You know, I think I remember this from my American History class way back in the 20th century. When I think about it, I believe that a prominent figure in this movement was someone names Daniel Shays. Isn't that the same name as the Professor Shays that hangs around here?

[HopingtoFind]

Originally Posted by LHarveyMadman

HopingtoFind, I also wondered whether they intentionally made me late in order to push the modification through. However, I was told that my modification was already approved in late October, and they didn't "make me late" until mid-November. By that time, the ball was already rolling (verrrrrrry slooooooowly). So I don't think that's what happened.


Sorry, Hoping, here's a pet peeve alert: it's "principal" that needs to be lowered, not "principle". The lenders' principles are low enough as it is.

Second pet peeve alert: I really hate these smileys.

Ok.. maybe not the case with your loan.... as *** mentioned your loan amount is too high for either Fannie or Freddie..

Yes... my concentration is not too much on spelling rather on what I am thinking... sorry.

[LHarveyMadman]

Originally Posted by Woodland Hills Worrier

Somewhat off subject, but I am curious as to your opinion on the current debate regarding foreclosure and loan modification. Seems like they are putting some teeth or sweeting the carrot or getting a bigger stick, don't know how to put it, but does your reading of the current legislation look to you like the government is going to start using threat of bankrupticy court principal modification as a way to bring lenders to the table? Do you think the process is so complicated by servicers, investors, and bundled mortgage-back securities to allow any real reform to take place. Would appreciate you insight. Thanks.

I don't think I have any special insight, but I think Obama is going to be using an approach similar to what was already arranged by the Bush administration. In the last day or so he has called for the remaining $350,000,000,000 of that bailout fund to be released to the banks, despite the fact that there have been obvious concerns about what is being done with all that money.

Unfortunately for the little man, the banking/credit/finance industry is very investment-driven. If it weren't for the MBS investors, the banks would have only a limited amount of funds to give out as loans. If the investors are not kept happy (in the form of bailout payments that allow the banks to keep their promises to their investors), then they will stop buying mortgages and the banks will have less money to lend to prospective borrowers.

It's sad. Like BofAsucks noted, a similar crisis occurred 100 years ago. People warned of this back in the 1990s when lending criteria were loosened, but nobody listened.

[LHarveyMadman]

Read this article from 1999. It provides some insight as to how we came to where we are today. It's eerie to read the warnings that some people already had.

Fannie Mae Eases Credit To Aid Mortgage Lending - New York Times

[BofASucks]

[quote=Woodland Hills Worrier;53707]thanks for the responses. I was on hold at CW for 15 minutes before an operator told me that I would have to call back due to technical difficulties. She said the "technical difficulties" were the 500 other callers on hold with no reps to talk to them. I was hoping to find if CW held my first and 2nd mortgages or if they had bundled them off somewhere. Evidently a huge problem in the mod process is getting all the paperwork sorted out. It may be that becomes one of the reasons the government steps in and creates some kind of universal restructuring for all underwater loans. Am I dreaming or could that be true?[/quote]""


I suspect that all of the major lenders and banks are swamped just as you describe. That would make sense that the people who are 30-60-90 days late would go to the front of the line. But I hate to hang our credit rating out there for them to screw up.

[emorybetsy]

LHarvey

You are my inspiration! And I was hoping you could give me some advice. I am currently working with NACA but I feel like I am not doing anything! I feel like I am treading water and sinking fast. I have contacted a lawyer and it looks like we will have to file chapter 7 to get out of the mess we are in. My lawyer is concerned about how high my mortgage payment is and wants me to modify before we file. It looks like March or April will be the best time for me to file. In a nutshell my problem is that I need my mortgage extended out to 30 years. I don't want interest or principal reduced, I'm not late and they won't help. Does my request seem unreasonable? If they agree to my plan it would reduce my payment by $1500/month and I would pay them back and extra $38,000 in interese! Win win right? What would you do? I trust your instincts!

[LHarveyMadman]

Hi emorybetsy,

I don't know if I have any additional advice to offer. I have been following your situation, and these are my opinions/observations:

1. Your situation - 3 distinct loans - makes a modification very complicated. Like you have learned, the decision to modify a loan is left to the investors. In your case, you could have 3 different investors making 3 different decisions. While each of them may independently be willing to modify the loans that they have bought, it seems highly unlikely that you will be able to find a single, unified modification that would combine the 3 loans into 1.

2. Given this problem, I'm worried that NACA is giving you false hope by saying that they might be able to find a single solution to your problem. I'm concerned that while you wait for them to get back to you, you are losing time to pursue other remedies.

3. The most logical way to combine these loans into a single 30-year fixed rate loan would be through a conventional refinance. B of A obviously recognized this, which led to the confusion that you encountered a couple weeks back. Your combined loan-to-value ratio is around 80%, which the threshold necessary these days to do a refinance, so you are theoretically in a good position here. However, your credit score is low, which is a major impediment, and it is painfully ironic that your score is low because you kept your mortgage current at the expense of letting other accounts go delinquent.

4. I recommend visiting the forums over at myFICO.com, specifically the "Rebuilding Your Credit" forum. This will give you tips on how you can increase your score. Also, visit the "Mortgage Loans" forum and post your current debt/equity situation. There are 2 very good mortgage experts who lurk there who can give you some guidance. A refinance may not be completely impossible, but see what they have to say. I believe that if you can bump your score up to 580, you'd be able to go FHA.

5. You explained where the money for the 1st loan went (refinance and second floor addition). The 2nd loan was a safety net that went to pay other debts. What did you do with the money from the 3rd? The only reason why I asked is that I had a friend who took money out money in a refinance, and when she was asked what she did with the cash, her answer wasn't good enough for the lender and her modification got denied (see post #52). Do you have any of this cash left? If you could pay down a chunk of your debt, it would bring your LTV more comfortably below 80% and you would be in a better position to refinance, if it came to that. I believe that one of the mortgage experts over at the FICO forums will say that having 20% equity solves a lot of credit score problems.

6. If you are able to refinance, it will not be at the best available interest rate because of your FICO scores. But it will stretch your payments out over 30 years, and should lower your payments.

7. If refinancing is completely out of the question, then you might have to request separate modifications of each of your loans. Start with your 3rd loan, which has a high balance and interest rate.


Those are just my opinions; anyone here can feel free to disagree with me. I'm not a mortgage professional, but I have spent a lot of time learning about the nuances of the industry. I don't have any experience with NACA, so I may be completely wrong about whether they can make something work.

Good luck.

[emorybetsy]

You are the best, thanks for putting so much time and thought into your answer. I feel like a pain in the butt, but... I just feel like there must be something I can do, should do that I am not.

I am afraid it is too late to rebuild our credit. We have been advised to file chapter 7 from two different sources.

The problem with BoA isn't the investors, they haven't even mentioned that, they just say I am not late and I don't have an ARM, so I don't qualify. Should I push them, keep asking?

FHA is an option, I have spoken to someone about that. We would have to have an appraisal done ($445), but maybe worth it. The house has to come in at $314,000 for that to work. Maybe I will get a market analysis done first for free, see if we are in the ballpark.

NACA scares me, I hate that you can't talk to anyone once the initial consultation is done, then just wait 45 days for an answer.

As far as where the money went? I guess the majority of it went directly or indirectly into the house, keepin up with the Jones, and trying to keep our ship from sinking. We should have filed two years ago, but ironically it it was a good thing that we got the equity out already or the bk court would force the sale. Sad but true! I should work on that answer I guess!