Bank of America load mod situation & draft hardship letter

[brinkmad]

I am planning to apply to Bank of America for a loan modificiation. I have not yet fallen behind in my payments, but I have lost my job.


I am getting mixed information as to whether or not BofA will do a loan mod for loans that are still current. Has anyone had experience with this?


My financial statement shows income from unemployment, part-time teaching & some freelance work. The total financial statement shows a deficit of $200.00.


Some people told me to wait until after a get a permanent job. That could be soon, or it could be months.


My hardship letter appears below. Any input for my situation would be appreciated.
____________________________________________

To Whom It May Concern:

I am writing this letter to explain the unfortunate set of circumstances that will cause me to become delinquent on my mortgage in the near future. I am doing everything in my power to make ends meet, but will soon fall short. Please consider working with me to modify my loan.

Background - There are several issues contributing to my current situation:
∙ Property value decline - My property is now worth about 15-20% less than my purchase price, eliminating any equity in the property, along with the possibility of refinancing.
∙ Job layoff - On November 11, 2008 I was laid off. While I continue freelancing, work has been reduced. My former employer has provided limited income since my layoff (checkstubs available), and I expect that to continue into January, and possibly February. I will receive unemployment, but it is a fraction of my former income.
∙ Unrealized income expectations - When I first bought this house, I was expecting a significant bonus and promotion at work, which did not come to fruition. I planned to put those funds toward my mortgage.
∙ Unexpected expenses - This property is larger than my last home (and part of a homeowners association), so it requires more investment in upkeep than I anticipated. At this time, the house does not need any significant repairs, but the homeowners association has notified me that outside paint is required in the next few months.
∙ Reduced credit line - My second property is a rental that is breaking even, with good, happy tenants. I have a Bank of America HELOC on that property, but Bank of America reduced that line of credit by approximately $60,000. That line of credit was my emergency fund.
I am a sole bread winner, but have had no problem making these payments since August 2007. As a homeowner for more than 11 years, I have never fallen behind in my payments. I am now trying to be proactive in anticipation of reduced income--I am concerned that I will fall behind. I fully intend to meet my obligations, so I am making every effort to increase income and reduce expenses. As such, I request your assistance.
Loan modification request
I would appreciate the opportunity to work out a loan modification with an interest rate that is reduced and frozen for the duration of the loan. In the current economy, I am uncertain as to whether my next job will be in my former salary range. If the interest rate is just frozen for 2 to 5 years, I believe I will find myself in another problematic situation in a few short years from now.
I am also asking for consideration to temporarily suspend my mortgage payments for a few months, if possible. I intend to continue making payments, but a reprieve option would be a great relief.
We could discuss extending the length of the loan, if necessary.

My efforts
I am confident that my situation will improve, and I will recover from this. I am actively engaged in a job search, spending more than 40 hours per week using a variety of job search methods and resources (including an outplacement agency). I have been getting phone calls and interviews. I have an MBA along with good skills and experience in several industries. My local area does have a variety of employers, so I believe it will simply take some time to find the right fit. My professional network indicates that local job searches are averaging 5-7 months.
While looking for my next job, I am making every effort to “close the gap.” I have never been an extravagant person, but I have become even more careful and have been actively adhering to a strict budget. In addition to applying for unemployment and seeking contract opportunities for short-term income, I have increased my workload as a part-time instructor and tutor with the
To demonstrate my commitment, I will also evaluate more complex options with more significant tradeoffs. For example, I could borrow from retirement investments, although this has significant tax consequences. I do have open credit cards: though I despise credit card debt, this may become necessary. Selling my car to get an older, less expensive car requires further evaluation, but could reduce monthly expenses. I can consider jobs that have significantly longer commutes, lower salaries or commission pay. I could consider getting a roommate, even though this is not an appealing option. Ultimately, I do recognize that additional sacrifices may be required.
Let’s work together
My home means a great deal to me. When I do find a solid job, you can be certain that I want to put any extra discretionary income toward it. For the long term, I want to be able to pay down this loan, as well as invest in maintenance and improvements on this property.
Please work with me to lower my payment so I can keep my home, protect my strong credit rating, and maintain a good relationship with Bank of America.
Thank you in advance for your time and consideration in this matter.

[Dan Bailey]

brinkmad,
Glad you found the forum and posted!
Starting your process early is a good idea....all they can say is "wait". Then re-send again!

*** or Moe will be by as soon as they can to give you some direction/advice for your situation. Hang in there and good luck!

[Moe Bedard]

HI brinkmad,


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

The letter is very good.........just make sure that once you get the process started that you stay in touch with them for updates on your file..........
Bank of America
1-800-936-6362


Please keep us posted on your progress............

[LHarveyMadman]

brinkmad, I think the letter looks good. It's often advised to keep your letter short and to the point, but I think that in certain situations a more detailed letter such as yours is appropriate. My letter to B of A was lengthy, as well.

I was not behind when I got my modification from B of A.

[HopingtoFind]

brinkmad... because it is up to the investor, the only way to find if you need to be current or not in order for them to modify is to call BofA and start the process.
In our case BofA/Fannie Mae requires us to be late...

[randy allen]

Does anyone know how this turned out? My situation is very simular and I was hoping to get more info.

thanx
randy

[brinkmad]

VICTORY!!!!

I am VERY happy to say that I was approved today!!! It was a long, tedious process, but worth the effort.

Update
My investor was Wells Fargo. Wells Fargo will not reduce principal balance.
I did not hire or pay anyone for assistance. I did this successfully on my own.

For those who are unemployed – I learned early on that unemployment income would not be sufficient. I was able to get part-time teaching income. Low wages, but it helped.

It can be difficult (impossible) to find out exactly what they want to see. I found an analyst who did tell me about 4 months ago that my spread was about $1,000 off. So I asked “If I sell my car to eliminate a $450 car payment, and get a roommate to increase my income by $600, will that work?” She said yes. Information—beautiful thing!!

The investor (Wells Fargo) would not help me while I was current—they required me to go into forbearance. BofA handles this well for 2 reasons:
1) They will not have someone go into forbearance who does not appear to otherwise qualify for loan mod. Other institutions have you do this as a first step, then after you are behind, they will start to evaluate whether or not you may/may not qualify. BofA will “preapprove” you first.
2) BofA stops reporting to the credit agencies while the borrower is in forbearance. For me, they will not report to the agencies until after I make my first payment on my new loan.

Transaction Overview
No fees! No payment for 3 months (1st pmt Nov 1 09)
My original loan - I was 2 years into a 10/1 ARM

They are writing a new 40-year loan. P&I, no more interest-only option.
--First 5 years: 3.125% rate fixed (reduces my pmt almost $700/mo)
--Next 35 years 6.125% rate fixed

The new loan balance will include the variance amount from the 3 months forbearance, plus interest from the next 3 months that I do not have a pmt. So, the principal balance will be higher than my current principal balance.

The loan will not have a prepayment penalty. So, after I get a job, I could refinance this.

Overall, I am relieved and happy. Hopefully this information is helpful. Good luck!

[brinkmad]

I just went back & re-read my letter. I got everything I asked for!

My payments are reduced for the life of the loan.

[brinkmad]

One more thing--I asked my analyst if I could qualify for any of the "Obama" benefits, and he said my lender is not participating in those programs.

[LHarveyMadman]

Congratulations, brinkmad! It was a long time in coming, but you got there. Nice work!

[Moe Bedard]

AWESOME AND CONGRATULATIONS!!!

[windyCA]

Originally Posted by brinkmad

I just went back & re-read my letter. I got everything I asked for!

My payments are reduced for the life of the loan.

Is the 3.15% fixed for the life of your loan?

Thanks.

[cheri]

we are late for the first time, i dont know where to begin, we were in the middle of a loan mod with B of A, and denied, we even had an attorney, they claim we showed no hard ship,,even though we are in an interest only loan for 1 more year,, we borrowed last months mortgage to pay it, and all bills are late, so i had to catch up on car payment this month, My husband is very scared and i dont even know where to begin, my friend modified her own loan with chase , she was paying 3000 a month and went down to 1100 a month for 5 years, 2 months of tedious always calling and bugging,, but it paid off,. the bank sent us a letter with a hud number to call?? anyone heard of that? we want to consolidate my husbands cards but hes scarerd, but he pay 900 dollars minimum payments a month,, the guy only makes 1,200 every 2 weeks after taxes, and I make about the same. But i lost a job a couple years ago and we have been struggling ever since, i now have another job, but the cards were used to pay bills and food. does anyone know if it looks worse to consolidate the cards before trying another modification?? and is anyone famaliar with the hud number B Of A gave me?? thank you

[SillyWorld]

Originally Posted by cheri

we are late for the first time, i dont know where to begin, we were in the middle of a loan mod with B of A, and denied, we even had an attorney, they claim we showed no hard ship,,even though we are in an interest only loan for 1 more year,, we borrowed last months mortgage to pay it, and all bills are late, so i had to catch up on car payment this month, My husband is very scared and i dont even know where to begin, my friend modified her own loan with chase , she was paying 3000 a month and went down to 1100 a month for 5 years, 2 months of tedious always calling and bugging,, but it paid off,. the bank sent us a letter with a hud number to call?? anyone heard of that? we want to consolidate my husbands cards but hes scarerd, but he pay 900 dollars minimum payments a month,, the guy only makes 1,200 every 2 weeks after taxes, and I make about the same. But i lost a job a couple years ago and we have been struggling ever since, i now have another job, but the cards were used to pay bills and food. does anyone know if it looks worse to consolidate the cards before trying another modification?? and is anyone famaliar with the hud number B Of A gave me?? thank you

If they told you to call HUD that means you have an FHA loan, and the mortgage company is no more than a servicer to the loan, and if your late HUD can guide you for help.

[cheri]

thankyou so much for answering, wow I didnt know we had an FHA loan?? I had checked the FHA site a while back and didnt find us.. I will call that number and see what happens, thanks again

[SillyWorld]

Good Luck

Let us know what happens

[jthompson40]

Back in February of 2009 I tried to refinance my home. Countrywide/BOA told me that I would need $60k down due to the drop in value of my home in Texas.

I applied for a loan modification in the beginning of May. I call at least 3 times a week and get the same answer. They always say that they have received my documents and it takes 30 to 90 days. I have made my payments but am now past due. I am in a 2yr ARM with a 9.99 interest rate. I know, crazy rate, but I was assured by my broker that it would drop in February. It didn't. Same rate. No late payments. My payment went from $2200 to $2700 this year. My income went from $12k a month to $6k a month. We are in the process of getting rid of our depts to compisate for the loss of income. We have even moved in my wifes retired parents to help us and them.

Has anyone had any success with this type of situation?

[bas65]

We have been trying to get a loan mod through BofA since March. Went through all the channels and finally reached an analyst. They came back and said that BofA is not modifying loans that are owned by BofA. I tried the executive letter route, and got immediate attention, but received the same answer. They would help me into a refi, but my current income does not qualify.

My mortgage is an interest only loan; and had to take money out of my house when my company went under to cover my business loans. I currently have a steady income which doesn't cover my expenses. So I started a consulting business on the side, that has tanked, and am advising others on staying afloat or how to shut down. I'm trying to reduce my burn to stay afloat, which is what I tried to explain to BofA, and live to fight another day.

Has anyone run into this same situation? I was under the impression that prior to the second infusion of TARP, BofA agreed to get on the loan modification program...I guess not for their own loans. Any suggestions????

[jthompson40]

Called BOA to check on the status of my modification. Nothing yet, but I was told that I was behind 3 payments. I asked about the two payments that I made since we started the modification process. (which would put me only 1 payment behind). They told me that these payments would not go toward the loan until the loan modification was approved or denied.

[CouldaWouldaShoulda]

bas65 - "BofA is not modifying loans that are owned by BofA" Yes, I've been told the same thing. Does not make sense to me either. It would seem that if they are both the investor and servicer they get to make the call. Anyone have any insight on this stance of theirs?

[windyCA]

Originally Posted by CouldaWouldaShoulda

bas65 - "BofA is not modifying loans that are owned by BofA" Yes, I've been told the same thing. Does not make sense to me either. It would seem that if they are both the investor and servicer they get to make the call. Anyone have any insight on this stance of theirs?

They are not telling the truth!

My loan is owned by BoA as well, when I called, I was told the same thing before, sometime I got different answers.

But I am sure that they do modify their own loan, they can even do MHA program for their own loans(I was told that they only do MHA for FM loans before, but when I finally talked my negotiator in BoA, he said they do MHA for their in-house loans)! Just go ahead to apply and keep calling and updating your financial until they said you qualify for some programs. Based on my own experience, if your deficit is too big, your chance is slim. However, the BoA in house mod is only fixed for a few year, then interest will go back up to either market rate or your original rate.

If you haven't done so, try NACA route, I think you can get the best outcome with NACA.

Good luck in your mod process!

[Here's Hoping]

Hi Windy CA... "Based on my own experience, if your deficit is too big, your chance is slim. However, the BoA in house mod is only fixed for a few year, then interest will go back up to either market rate or your original rate."

What is too big for a deficit? This is based on your current budget with current payment, right? We are short about $350 per month since my husband was laid off. Is that "too big?"

Have you been able to modify your loan? Our rate right now is 6.875 interest only for 8 more years, after that our P&I pmt will increase by $400 for the remaining 30 years, so a market rate (today's) would be fine with me!

[windyCA]

Here's Hoping,

I am working with NACA, at the same time, I called BoA every week to check my status. The reps went over financials too. My original deficit was more than $1000, they told me that there is very slim chance that I can get a mod. Then I updated the financials a couple times (reduced expence and bringing in a roommate) to have a deficit of $150, then they said I qualify for some kind of mod.

I emailed OOP after 2 months NACA submitted my mod but not progress at all, got a call from OOP and Loss mitigation the next day. Waited another 1.5 months, still no progress, called the lady in OOP again, finally got the negotiator's phone number and talked to him.

The negotiator offered me either 31% of gross income for 5 yrs (2% rate), then increases back to original rate (6.375%), or 3.375% fixed for life. I told NACA about the offer, and asked if they can get me a better rate fixed for life. Then the negotiator called me and told me that he talked to NACA, and updated my offer to 31% of gross fixed for life!

This was just happened lask week, they haven't sent the final term to NACA yet as of today. So I am in another waiting stage now, don't know how much longer to get the paper work.

[CouldaWouldaShoulda]

WindyCA

OMG! That ROCKS! Well done!!! Can you represent me? Were you late? We're not, but I'm terrified of losing our savings, then our health insurance... then what?! Oh,that's right, swine flu...Mercy ...

[windyCA]

CouldaWouldaShoulda,

No, I am not late. I am still current, and will try to stay current all the way through the process (hopefully they won't drag me to default)