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BofA DOJ Trial Mod Package with Principal Reduction & Lower Interest Rate--Please Advise

Discussion in 'Bank of America Mortgage Help' started by burnedoutbayarea, Nov 8, 2012.

  1. burnedoutbayarea

    burnedoutbayarea LoanSafe Member

    There are a lot of experienced and intelligent people posting on this website! It an amazing source of information and we are hoping for some insight into our current situation. I have emailed details of our 3 year long battle with BofA to the Office of the President, the CFPB & the Office of Mortgage Settlement Oversight. Our new CRM has been very pleasant and as helpful as she can. I believe sending those emails helped expedite our mod. We just want to hear opinions on whether this seems like a "fair deal". Apologies in advance for length of post, but wanted to try to be thorough.

    BACKGROUND INFO

    -Original Countrywide 2005 -$1,000,000 interest only @ 5.375 for 10 years then option arm for 20 (4,474/mth) did not include taxes or principal
    -Huge loss of income...missed last 22 payments totaling about $98,000 & they have paid our country taxes (1.6% tax rate) totaling about $17,000
    -Fedex Package with DOJ offer showed up on our doorstep late Sept
    -BofA asked for paystub and P&L for our small business...we sent in paperwork mid Oct.
    -Two weeks later they offered us a DOJ Trial Mod with three payments of $5,874 each. (by our calculations 37% of our gross income, but include principal, interest and taxes)
    -Our home is no longer listed on the Recontrust website...completely gone...not just delayed sale date

    Here is the part of the letter we are most concerned with:

    "If you complete this trial period plan by making all payments as outlined below, any past due late fees will be waived, interest and advances that we paid on your behalf will be added to your principal balance and your loan will be brought up to date. We will them permanently reduce your principal balance by the amount of $236, 734.55. In addition we will reduce you interest rate to 2.75%"

    Disclaimer at bottom of letter states amounts (reduction and interest rate) are based on current status of loan. Also, if interest rate is below current market rates, after 5 years, it will increase by 1% yearly and cap at market rate that was being charged when loan was prepared and remain fixed at that rate for life of loan.

    Here are our QUESTIONS (CRM couldn't answer these--but she said the trial mod payments were based solely on our gross income...nothing else):

    1. Our understanding is that the trial mod payments are based on current amount due before reduction (approx $1,115,000). Does that sound right?

    2. The reduction will be noted after payments are made...leaving us with a principal balance of approx 878,000 (this is about current market value)

    3. We also believe that the length of the loan stays the same, so payments should be based on 23 years left on loan.

    4. We used a simple online mortgage calculator to plug in those numbers...878,000 at 2.75 for 23 years with 1.6% tax rate and got a number very close to their offer. Did we do the math right?

    5. Our original down was less than 20%, but we aren't sure if we were paying mortgage insurance in our original monthly payment...does anyone know if trial mod payments automatically include mortgage insurance and/or homeowners?

    6. Finally, will the three trial payments be deducted from the balance owed before principal reduction will take effect?

    Again, this site has been a wealth of information and guidance for us during the most difficult time in our lives. We welcome and appreciate any and all advice from the community that may help us decide next steps. Our good thoughts are with everyone who is going through this ordeal...
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Welcome to the community.

    Your trial period payments will reflect your permanent mod payments so this amount should be based on the amount due on the loan after the principle reduction. I would not be worried about the disclaimer at the bottom of the agreement because your interest rate will never increase more than 1% because current market rates are approximately 3.25-3.50%.

    Yes you seemed to have done the math correct, your trial period payment should be based off $878K and 23yrs left on the loan if they did not mention the term was extended in the agreement.

    Yes after the modification principle, interest, taxes, and insurance should be included in your monthly payment. Congratulations this is an excellent modification you have been offered!
  3. burnedoutbayarea

    burnedoutbayarea LoanSafe Member

    Thank you for your input, Evan. I suppose we are just so tired and this was very overwhelming...especially since the payments were higher. It's been a year since our first trustee sale date was posted. I don't know how much was our perseverance (because we had mentally given up) and how much was pure luck, but BofA seems to be working MUCH more quickly than in the past. I can't say enough about the wealth of information on this site. It definitely helped us immensely. Our thoughts and prayers with everyone who is going through this agonizing process.
  4. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Thanks you so much for the kind words and wishing everyone luck throughout this extremely difficult process. It can be very grueling especially if you applied for a loan modification two years ago when these lenders these lenders were much less organized then they have been the last year or so.
  5. I'mSickOfThis

    I'mSickOfThis LoanSafe Member

    Congratulations on your lengthy fight with BofA. If you don't mind, we're going thru the DOJ process right now and I have a couple of questions. I noticed you said you were 22 months in arrears on your mortgage. Did BofA ever ask you why you didn't pay your mortgage or what you did with the money each month? We haven't paid our mtg is 5 months. I just received a Fedex letter today requesting W2's and an up to date P & L for our business. Thanks for your response and again, congratulations!
  6. burnedoutbayarea

    burnedoutbayarea LoanSafe Member

    Hi... No, they never asked and to be honest, our whole point was that we didn't have any to save due to a failed business and another one slowing down. They didn't ask for bank statements either. We are still in shock over the limited number of docs they needed. We sincerely wish you luck...happy to try and answer any questions you may have.
  7. novembermommy

    novembermommy LoanSafe Member

    So glad to see this post! I am new to this board and still trying to navigate this website.

    Your situation is almost identical to mine, except that my principal balance is $715,000. I was with Countrywide originally, had a 10yr arm, our business income was cut in half and we lost a large amount of money in an investment, sued for our dog running into a boy (won the case but cost us $30K in lawyers fees), had to file bankruptcy and are now 31 months behind. Since the bankruptcy just completed we were just about to apply again for modification when all of a sudden last Thursday a Fed Ex package just showed up on my doorstep! I got online that night, found this site and the next day (friday) sent the requested profit information via Fed Ex.

    I was surprised at how little paperwork they asked for. Your post is reassuring to me. We don't want to lose this house but had started preparing our 3 kids.

    Our interest only payment without taxes and insurance was $3800 a month. Our income is around $9000 a month. Not sure if they calculate the 31% with or without property taxes and insurance?

    at one point our past due amount was over $100,000. But when I called right now, they said my past due amount was $40,571. I am completely confused! They said they took off some money for impounds and late fees but the total was way less than the difference I am seeing.

    We have a 2nd mortgage (taken out when we bought the house making up 10% down) for $87,000. Its not owned or serviced by BofA so what I am seeing is that I may not get help for this. Its owned by Bank of NY and serviced by Greentree.

    Any additional information, thoughts or feedback would be helpful!
    Thank you,
    Tara
  8. novembermommy

    novembermommy LoanSafe Member

    I wanted to add that the current value of my home (we are in california) is around $550,000. With the 1st, 2nd and past due amount we owe over $900,000 (which is what we paid for it 6 yrs ago).
  9. novembermommy

    novembermommy LoanSafe Member

    Wish I could edit my last post!
    I called back Bank of America and talked to someone else 1/2 hr later. The 2nd person said in fact that I do owe $124,000 and that doesn't include everything. The $40,571 that the previous representative gave me (even after me telling them I believe it was triple that amount), was completely incorrect. Goes to show you get different information depending on who you talk to! Frustrating!
  10. burnedoutbayarea

    burnedoutbayarea LoanSafe Member

    I ask about the principal, interest, taxes and insurance every time I call! Each time, they indicate that they are all included and I also found out that if you weren't paying PMI on your original loan, they add it with something called Forced Placed Insurance (I didn't like the sound of that). We still get a bill every month from BofA with our past due fees, taxes they have paid on our behalf etc. Do you have anything like that?
    As far as your balance owed not being confirmed, I would say call again and again until you start getting consistent numbers. Call or email the contacts I mentioned in my first post, the OOP, the CFPB, the Oversight Committee, ANYONE. I get the sense that BofA is working under a deadline and will pay attention if you contact them often enough.
    Generally speaking, our new CRM has been efficient and consistent, and talks to us like we are real people. However, we have also learned which questions to ask etc. I always write down EVERYTHING I want to know. The other slightly concerning point I was also told by my CRM today was that if any changes are to be made to the length of our loan, we wouldn't know until the mod is permanent. By my calculations, they have probably already done that.
    I truly truly hope this works out for you, and the frustration eases once you get some consistent answers. Hope I was somewhat helpful...
  11. kennypatel

    kennypatel LoanSafe Member

    Hello,

    After making your 3 trial payments, how many additonal payments you had to make to get your final loan modification? I made my 2nd payment and next month my third payment. I hope you got your final mod. Please let us know.

    Kenny P.

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