Selling After Modification... Advice Needed!!!


LoanSafe Member
Help! I am currently in contract to sell my home and purchase a new one. We did a modification with Bank of America years ago... started the process in 2011 and it didn’t finalize until 2014. Heres my story, any advice would be greatly appreciated... I’m frantic because now we don’t have the money we agreed to as a downpayment for the new house.

We applied for a loan modification with Bank of America in 2009, we agreed to a trial payment of $2851.51 and a $25k partial claim (balloon payment) that would be due in 2041.

However, our mortgage statements never reflected this trial payment agreement and we were still getting foreclosure threats and phone calls. I called almost daily and was constantly told to ignore the threats; we’re in the modification process and once the modification closes everything would be applied and the statements would reflect this.

But the calls and letters kept coming and the amount due on our statements kept getting higher and higher.

Every time I called BOA and explained my story, they said “oh we see now your in modification, ignore the letter and calls, and keep making your trial payments of $2851.51.”

In Feb of 2014 I received a new fed ex package with a new modification agreement. This one reduced my payments to $2600, and a $75k partial claim due in 2044. I called BOA who told me that since it took so long to close my modification, it expired, and I either had to agree to the new modification or come up with the difference from my original loan payments and modified payments plus my arrears. They told me since the first modification expired that this would replace it. The new agreement did state that it superseded any previous modifications, forbearances, trial payments, or agreements entered into before the date of the letter.

We had no choice but to sign it, we didn’t have the money to pay what they needed and I didn’t want to lose our home.

In June of 2014 (about 3 months later) we received notice that our original modification, the one that expired, was approved and signed off on 6/10/2014.

I called again and they said that they must have crossed and they would let me know what was finalized and I would see it reflect on my statements.

Within a couple of months I finally received updated statements showing all my payments were distributed, I owed $327k and a $40k balloon payment at the end. Finally done! Haven’t missed a payment since. Yay!

Which brings us to now—

I received a payoff balance from Bank of America recently and all was expected:

Principal balance: $293k
Forbearance fees: $17k
Expired partial claim: $22k
And some other fees: $3k

Totaling: $336k

We decided to go ahead with the sale of our home and purchase of our new house, signed contracts and were supposed to close this week on both.

About 2 weeks ago I received a call from my attorney telling me there were all sorts of leans on my house and asking me what they were about.

1)Bank of America (principal, expired lien, forbearance): $336,000

2)HUD: $75k

3)HUD: $25k

I called Bank of America and they explained to me that the $25k lien was an error and could be released and they would start the process but I do still owe:

1)BOA $336k(which includes the expired lien, forbearance and principal balance)

2)HUD $75k

Totaling $411,000

My original loan amount was 405,000 in 2008. How can $411k be accurate after years of paying??

They are saying that I applied for 2 separate modifications and both were granted.

I keep trying to explain my story, but it’s long and tedious and I don’t fully understand the terminologies or legal mumbo jumbo and they stop listening after a while and never really understand what I’m saying.

I keep going back to section 4d of both of the modification agreements which clearly states that it superseded any previous modifications, forbearances, trial payments, or agreements entered into before the date of the letter. But they keep saying both are correct. What do I do?? I’m tired and out of time. Both my sale and purchase contracts are supposed to close by 10/1, and now I don’t know what to do.

I don’t have the down payment money that I agreed to for my new mortgage anymore if both of these liens are accurate.

1)Do I hire an attorney to fight them?

2)Do I just give up and pray that I can give less of a down payment on the new house and just go with it?

3)Do I back out of both deals and lose the $10,000 down payment I already gave for the new house and risk the chance of getting sued for my house from my buyer?

Panicking severely! Any help would be more than appreciated!

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Quite the experience you have been through recently, sorry to hear about that and it sounds like there is something extremely fishy going on. With where you are at in the process it seems to be difficult to accomplish some of these tasks put in front of you. With the close of escrow on the new home coming rapidly you don't have an option to try and avoid this 25K lien that they say is in error, it sounds like you would need to battle that after the fact.

The new home loan shouldn't be impacted as the modification that you received my guess has been longer than 2 years, that is the required time period needed for a traditional loan product.

Other than that I'm not sure exactly what program you're going for but it sounds like it needs to be restructured and you're already working with a loan officer. Did they provide you with any options based on the funds you have available? If you need to flip the loan to FHA and have a lower down payment, USDA...etc those would be things I would look into.

If you do end up bailing from this transaction, if you have not signed a contingency release (physically) you should be able to get your earnest money deposit back. Ultimately this is a very unique situation and something that would have been extremely difficult to know when entering into these transactions.

Hope it all works out the best and if you do need another lender to look at the file I would be happy to.


LoanSafe Member
JPar... yup.. your situation sounds very fishy. Most of us, if in your situation would burn the house, put it the ash in the bag.. send it to the lenders. But it looks like you already have your list of options. Randomly pick one, the outcome would be pretty similar. They'll strip you for what you have.