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Horrible BOA Modification Offer - Now What?

Discussion in 'Loan Modification' started by hellokitty4me, Mar 11, 2011.

  1. hellokitty4me

    hellokitty4me LoanSafe Member

    So, we FINALLY got the modification offer today after about 18 months of dealing with BOA... lost paperwork time and time again, negotiators quitting, emailing the OOP repeatedly, etc. You know the drill.

    My husband had lost his job 18 months ago and we entered into the trial program which was supposed to take 3 months (laughable). We made each and every payment of $1600 for 18 months. So, after all this time, we get the letter today and the in-house modification terms are:

    Old Payment: $2101
    New Payment: $2079

    Old Rate: 7.3%
    New Rate: 7.250%

    Old Balance: $223,000
    New Balance: $238,000

    PLUS the loan is now extended for FORTY (yes, 4-0) years!

    We have until March 19th to decide what to do. I am sick over the whole thing. What should we do? Of course in the 18 months, my husband found a new job ($20,000 paycut from the time we bought the home). So, the newest round of paperwork had new income. I am sure that was a factor. Had I know what we were in for 18 months ago, we would have NEVER gone down this road.

    I feel like we have NO choice, but to accept the offer for fear of this dragging on for more months or even foreclosure due to the $15,000 past due.

    Here are some of my questions...

    How did our balance go up by $15,000?! I understand that by paying the trial payment there was a shortfall of $500 each month, but I just don't get it.

    What about our credit for the past 18 months while they dragged this out? BOA has told us they will go in and make it current as mentioned in the original trial letter. Has this happened for anyone?

    This has got to be the worst modification I've seen on here.

    BIG THANKS in advance for all your help and advice!
  2. capote203

    capote203 LoanSafe Member

    HelloKitty - Assuming this is a HAMP since you had trial payments? Does your monthly payment for 1st mortgage, property tax, home insurance, HOA) come to 31% of gross income?
  3. hellokitty4me

    hellokitty4me LoanSafe Member

    This started as HAMP, but along the way (I think 6 months ago) we were told we did not qualify for HAMP (don't know why as we had not resubmitted new financials at that time and old financial showed dh as still unemployed) and would be receiving an in-house modification.

    Our new monthly payment of $2079 (mortgage + home insurance + tax) is now 23% of gross income.
  4. jakelabry

    jakelabry LoanSafe Member

    Whoa - 23% of gross is pretty darn good! You would never get that with HAMP which would not take your payment lower than 31%. I'd say you are incredibly fortunate and should take this gift.
  5. hellokitty4me

    hellokitty4me LoanSafe Member

    My biggest issue is the $15,000 past due in interest that they say we now owe and want to tack on to our loan. If they hadn't dragged this out for 18 months, we would owe no where near that. I don't think that is fair or in the spirit of what the whole HAMP program was intended to do.

    Can anyone answer the question with the credit report? Has BOA gone in and marked the length of the trial payments as current as promised?
  6. TomEason

    TomEason LoanSafe Guide Staff Member

    Depending on how underwater your home is, if it is, and how long you forecast it will take your home to appreciate to the point you would have any equity at all, the $15k add on may turn out to be rather insignificant. To put it into perspective, if it takes say 10 years for your home to recover it's value at the time of purchase, how significant will $15k be? You might consider this strategy, if the payment is affordable. Accept the modification. Then at some later date, maybe in a year or two, reapply for another mod. Or, you could later choose to simply stop paying and play The HAMPster Wheel Game (see that thread for tips on how to play), and live mortgage free for a long time. Good luck.
  7. marvelrules

    marvelrules LoanSafe Member

    They are such ass$%^&, I never use the word hate but its been coming up in conversations lately.
  8. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member

    Are you from Hawaii by any chance?

    I am getting my contract on Monday night, it's due back by the 19th ( Saturday ) but I only would have till early wed to send it.

    My contract seems to also be based on 40 years but due in 22 years with a balloon of over $350,000!!!!!!!!

    Payments start at 37% not 31% and at 3.75 % interest

    Also dragged through this for 13 months, never would have been late or bad credit, they caused.

    If you are from Hawaii please let me know because I am about to fight this!

    Who is your investor?

    Mine is BONY , they claim BONY will not allow extensions and I am going to contact Bony and so are some people with more power than me here!.
  9. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member

    23% of your gross IS pretty good!!!!

    However, you should not have to pay 15,000 if anything it would be $9000.

    And why not give you 30 years, that would also be only a small amount difference in payment, even with the $15,000 tacked on?

    This is a great deal for THEM!
  10. espo1357

    espo1357 LoanSafe Member

    The ONLY reason to stay in this property (based on the information you gave), is if you plan to live in the home the rest of your life.

    If that is not the case, don't walk, run.
  11. hellokitty4me

    hellokitty4me LoanSafe Member

    Thanks everyone for your responses. We still have not decided what we are going to do after deliberating all weekend. We plan to go back to the OOP first thing and complain that the accrued interest amount is unacceptable. They messed around for 18 months and now we have to pay the additional $15000?! That seems almost on the verge of fraudulent to me.

    We have no choice but to stay in this home because our credit has been ruined by this process. So, walking away isn't an option.
  12. hellokitty4me

    hellokitty4me LoanSafe Member

    Can you elaborate a little more on this? If we eat the $15,000 and take on the new $238,000, I can guarantee we will be underwater based on recent home sales in the area. At the current balance of $223,000, we may break even or have a tiny amount of equity. So, even if the market does bounce back in a reasonable amount of time in our area and we have positive equity, with the new mortgage, wouldn't we have $15,000 less?

    Also, what grounds would we have for applying for a new modification in another year or two? Would that only work if we get behind (which we don't plan on getting)?

  13. TomEason

    TomEason LoanSafe Guide Staff Member

    Thanks for your incisive question. I suggested you accept the modification now to preclude other possible adverse alternatives. However, that may have been an off-the-cuff suggestion. You can obviously pursue getting a better modification now. As for a future modification request, I've found no reason to suggest you cannot apply for one. After all, it's a loan workout between you and your lender and isn't governed by any law or restrictions, but simply an attempt to arrive at a win-win solution you both can live with.
  14. capote203

    capote203 LoanSafe Member

    Hellokitty - what was the amount of your monthly trial payment?
  15. TomEason

    TomEason LoanSafe Guide Staff Member

    You need to review the OP's situation; it's all there in an earlier post, very thoroughly laid out.
  16. capote203

    capote203 LoanSafe Member

    I just saw on your first post it was $1600. Over the 18 months, the deficit is $9018. What are they saying the additional $6K is for? Where you 3 months behind going into the trial? Or did the bank pay your property taxes for you, and are adding it into your loan?
  17. hellokitty4me

    hellokitty4me LoanSafe Member

    Yes, we were 3 payments behind. In the beginning, the reps at BOA suggested we wouldn't be eligible for the trial program unless we were at least 3 payments behind. DH was unemployed at the time, so we couldn't have made those payments even if we had wanted to.

    We are not trying to walk away from the mortgage. We are trying to do the right thing. We would be happy to pay the new payment of $2079; just not for 40 more years and with the extra past due balance tacked on.

    We have until Wednesday at this point to get the paperwork sent FedEx so that BOA can receive it by the 19th. We've sent a letter to the OOP detailing my original post.

    Can we decline or appeal the modification? If so, what happens and has anyone had any success?
  18. MyHAMP

    MyHAMP LoanSafe Member

    Hmm, I don't like to say it, but based on the numbers, I do believe there is not much to complain or appeal. The monthly payment is VERY reasonable at 23% and the $15K have a logical explanation as well. That's just how these mods are set up. We were much, much further behind and they added $120K to the balance (nope, that's not a typo).

    The $15K are simply based on the difference between the original contract and what you paid in reality until the effective date of the mod. And since you are not that much underwater, I would take it.
  19. MyHAMP

    MyHAMP LoanSafe Member

    Sorry, but as Moe already said, the website is not running as usual - so a double-post was created - again.
  20. hellokitty4me

    hellokitty4me LoanSafe Member

    UPDATE: We signed the modification paperwork in March. It is now September and we still have yet to receive a final copy of the paperwork. We have been making the proposed modified amount each month not knowing if we are in fact modified. Several calls to BOA have proven useless.

    We are still getting the runaround. We have been told by managers that they received our notarized paperwork, but for whatever reason it was not sent on to the final step and that it would be taken care of that week. We would also promised that we would receive a call back to confirm this. No shocker, but those calls never came.

    By the way, our past due amount has increased since March, of course. I am at a loss about what to do at this point! We tried to call an attorney, but they said since we signed the paperwork, he didn't see a legal recourse. I'm not sure about that since it appears the paperwork hasn't been finalized by BOA.

    Any ideas where to go from here???

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