Trial Period Plan

IAmKevin

LoanSafe Member
May 28, 2013
9
0
1
Los Angeles
Hello

In late July, I received documentation from BofA explaining that I have been approved to enter into a trial period plan. This plan explains if I make three scheduled payments on time, BofA will send a modification agreement that I will need to sign and return, resulting in my loan being permanently modified. The problem is I don't see any additional documentation explaining the details of this permanent modification... On Sept. 1, I was able to make the first payment but I'm hesitant to make the remaining payments because I don't know what my loan will modify into... Is this a big waste of time? The next two payments are due Oct. 1 and Nov. 1.

A friend suggested that I email Brian Moynihan at [email protected] so I did this. I very quickly heard back from a service rep and she stated that she works at Moynihan's office. She has become my new service advisor and she is requesting another RMA, Hardship Letter and pay stubs, which I'm putting together. Not really sure where I stand with all this, basically a bit confused. Any suggestions or advise would be greatly appreciated!!

Thank you very much
Kevin Gray
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
this a big waste of time? The next two payments are due Oct. 1 and Nov. 1.

A friend suggested that I email Brian Moynihan at [email protected] so I did this. I very quickly heard back from a service rep and she stated that she works at Moynihan's office. She has become my new service advisor and she is requesting another RMA, Hardship Letter and pay stubs, which I'm putting together. Not really sure where I stand with all this, basically a bit confused. Any suggestions or advise would be greatly appreciated!!
Hello Kevin,

If the payment are sustainable, I would definitely continue making the trial period payments as agreed if you would like to receive permanent assistance. It's rare for the servicer to disclose the final terms of the modification until you have completed the trial period. If you were approved for HAMP, here are the steps BofA would of taken to lower your monthly payment:

Step 1: Capitalization

In the first step, the servicer capitalizes accrued interest, out-of-pocket escrow advances to third parties, and any required escrow advances that will be paid to third parties by the servicer during the TPP.

Step 2: Interest Rate Reduction

In the second step, the servicer reduces the starting interest rate in increments of 0.125 percent to get as close as possible to the target monthly mortgage payment ratio. The interest rate floor is 2.0 percent. The initial interest rate would be fixed for the first five years then increase by 1 percent in year 6 and another 1 percent in year 7. For the remainder of the term the rate will be fixed at the prime market rate at the inception of the permanent loan modification.

Step 3: Term Extension

If necessary, in the third step the servicer extends the term and re-amortizes the mortgage loan by up to 480 months from the Modification Effective Date to achieve the target monthly mortgage payment ratio.

Step 4: Principal Forbearance

If necessary, the servicer will provide for principal forbearance to achieve the target monthly mortgage payment ratio. The principal forbearance amount is non-interest bearing and non-amortizing.

The amount of principal forbearance will result in a balloon payment fully due and payable upon the earliest of the borrower’s transfer of the property, payoff of the interest bearing UPB, or at maturity of the mortgage loan.

There is no requirement to forgive principal under HAMP.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
No problem Kevin, good luck and please keep us posted on your progress!
 

Fred

LoanSafe Member
Aug 27, 2014
24
0
1
46
Principal amount on my HELOC IS $175,000. We have not made a payment in 40 months. BofA has offered us a three month trial period. at $1500 per month. I am trying to understand this B of A program. I understand they are asking for three payments. We are delinquent 40 months and $50,000. The 50,000 includes principal interest and late fees. Bank reps are telling me that once the three payments are made, the bank will add the $50,000 to the principal amount of $175,000. Is this legal to add the principal portion of the delinquent amount back to the original principal? Should not the bank be adding only interest and late fees to the principal? My thought is that the bank is double dipping, taking complete advantage of the financial strees by adding principal to principal.

Also if the interest is added back to principal in calendar year 2017, will IRS permit this as interest expense for 2017.

Thanks in advance
 

Fred

LoanSafe Member
Aug 27, 2014
24
0
1
46
Principal amount on my HELOC IS $175,000. We have not made a payment in 40 months. BofA has offered us a three month trial period. at $1500 per month. I am trying to understand this B of A program. I understand they are asking for three payments. We are delinquent 40 months and $50,000. The 50,000 includes principal interest and late fees. Bank reps are telling me that once the three payments are made, the bank will add the $50,000 to the principal amount of $175,000. Is this legal to add the principal portion of the delinquent amount back to the original principal? Should not the bank be adding only interest and late fees to the principal? My thought is that the bank is double dipping, taking complete advantage of the financial strees by adding principal to principal.

Also if the interest is added back to principal in calendar year 2017, will IRS permit this as interest expense for 2017.

Thanks in advance