In House Mod

[kourtini]

Ok, this is a total long-shot... and I know... but has anyone heard of being able get an in house loan mod with the bank? I feel like we have nothing to lose by trying. However, I am not going to pay them any trial payments or give them thousands of dollars down to do it. If they could just lower our monthly payment $500 a month... then we have money that we are willing to give them! Beats the heck out of how much it will cost them to foreclose on our property and possibly have it sitting empty and rotting like the other hundreds of homes in our neighborhood. I guess the worst they could say is no?

[calgirl67]

It is definitely worth a try but in my experience it is a real long shot. But you never know, miracles could happen!

These banks have NO logic in their decisions - it seems they are all too happy to spend circa $50,000 to foreclose rather than just adjust the interest rate and let the current owner stay and maintain it.

Bear in mind the idiots you deal with at say Wells Fargo dont own the loan, its not their money they are throwing down the drain and they get paid big $$ and they get paid first in line when they foreclose.

The entire system is rigged first to bend over the average homeowner, then to bend over the owner of the note. Its so corrupt.

[SMinGA]

I did...

Have Bank of America, formerly Countrywide. House has not been appraised recently, and its hard to do comparables because its a newer house (8 yrs) in an older neighborhood (25 yrs). Original house on the lot was destroyed by fire ~10 yrs ago. Best guess is its between -10% and 10% equity. Could not rent for less than the old payment and get the same size house.

My story:
Income dropped gradually as hubby lost hours @ work, some living expenses increased. Used credit cards to cover the gap, didn't think it thru really to see that we were really in trouble. Started running out of room on the credit cards, as using them then paying them down to re-use only lasts so long with interest adding on! Once that backup plan failed, started falling behind on mortgage early 2009. Cut out unnecessary spending & I started looking for a 2nd job in April or May - knew by then that we needed more income.

Started 2nd job in mid to late October. At this point we were several months late on mortgage. Filed ch. 13 in December - but atty was inept and we ran into a slew of transportation issues right away. Made 3 mortgage payments & plan payments (Jan-Feb-Mar) then filed for voluntary dismissal in late March.

Once Bank of America had us out of BK status (that took a few weeks, and they would not discuss mod with me as long as my account was noted as being in an active BK) I called and asked about them working with us, perhaps to amortize the missed payments. We were now bringing in more $ per month - I'm making pretty good money on my part time job and able to get 20-30 hrs per week. BofA submitted me for an inhouse mod, I had to fax in paystubs, bank statements, tax returns, and submit a detailed budget to show expenses.

Timeline:
4-16-10 faxed in paperwork - officially 6 months late including April Payment
Original terms 30 yr fixed, 6.95% $1176 including escrow
5-21-10 BofA sent me mod paperwork to sign & notarize
Terms: Amortizes interest from missed payments; 3.875% for 2 yrs, then 4.375% for 2 yrs, then 4.75% permanently. New payment is now $979.37, includes slightly increased escrow payment because my escrow account is a bit empty from lack of payment. BofA did not amortize anything to fund the escrow account - so with the increased payment it will right itself over time. Will adjust downward next year.
6-1-10 paperwork due back to Bofa w/ certified funds of $979.37 <--this was the only payment I sent to BofA since requesting the mod
7-1-10 regular payment of $979.37 due... made it yesterday

[SMinGA]

Sorry that was so long.

A few quick tips, based on my experience.

Inhouse mods are less complicated than the federal/HAMP mods. Less red-tape I suppose since the government is not involved. I had no trial payments - think that is only HAMP. I don't qualify for HAMP, was not over 31% of my gross income on my original mortgage payment.

If your intent is to keep the house no matter what - then set $ aside so that you can start making your new payment as soon as the mod is approved. When I received the paperwork, I only had a few days to get it notarized and send back w/ certified funds. (Most of that goes to interest, about $120 or $130 of it was to fees.) They sent paperwork to me on a Friday by FedEx, rec'd it on Monday. They included a return FedEx envelope. Between the time they sent it and my deadline there were 2 weekends & a holiday. If I had not had $ set aside, we would have been SOL as the saying goes!

When you do your budget, it does not need to be as detailed as if you were filing for ch. 7. The reasoning is different. When filing for ch. 7 you want to show that you really have no money available, and that you're even short each month. IF you do that with a mod application - they'll decide a mod won't help because money is too tight. Would be like trying to save the Titanic, its going to sink no matter what. So no need, in my opinion, to show categories like entertainment, recreation, and such. Afterall, in months when you have no money to spare these things get skipped. At one point, someone from BofA called me to say we were declined because our expenses exceeded income. Turns out they calculated my part time job pay wrong and I made them fix it. (They were looking at net, but I get tips delivering pizzas. They are reported - show in gross but do not show on the net paycheck because I take them home daily. About $350-450 a month they were not counting, makes a difference!) My best guess is to show $100-200 remaining at the end of the month with your old payment, which shows you'll be much better off and able to handle the mortgage easily if they reduce it. They need to see that you're struggling now, but that a reduction in payment amount would allow you to keep the home. If they think the reduction won't improve your situation - they won't bother.

One last thing - we applied for the mod with outstanding debt. I did not include those debt payments in my budget. (We're not paying on it - ultimately will refile ch. 13.) When asked about that, I answered that our first priority is getting the mortgage in order and that we'll work on the rest later. Apparently that was sufficient. If you've just come out of ch. 7, that would not be an issue. But just wanted to point out that it did not hurt us to be in bad shape with all of our credit cards, and that fact was not held against us.

[kourtini]

Thank you so much for the info! That's really helpful. Of COURSE our first choice would be to stay here with a lower monthly payment. Our atty will be filing our bankruptcy (ch 7) this week. We included the home in the bankruptcy. I'm sure that they will not speak to us about a mod until our bankruptcy is discharged. So I guess for now it is a waiting game. We're just hanging out for now and saving our money. I have to say that the waiting part... and being in limbo is the WORST part of this whole thing. It's encouraging to hear that someone else got a loan mod though. So far all I have heard is denials. Congrats!!!!!!!

[kourtini]

Hubby just called to tell me that his friend's wife did just exactly this a month ago and they just signed paperwork for a permanent in house loan mod that brought their payments of $2200 per mon down to $777!!! I need that woman's help. lol!!

[SMinGA]

Its probably not $777 permanently - don't want to worry you but wanted to inject some realism.

I'm hearing some are getting rates down to 2% for 2-5 years, then increasing gradually to a reasonable rate to finish out the term. I'm guessing this is the case for your friend - and that in 2-5 years there payment will start going up. BUT it should ultimately top out below what it started at. Our final rate will be 2.2% less than what we started at.

Plus their term may have been adjusted from 30 yrs to 40 yrs. That would decrease the payment just a little also.

I do think for the inhouse mods they look at your income/expense scenario to see how much of a mod you need. We could have managed without a rate reduction - which is probably why they did not reduce it all the way down to 2%. If it had gone that low our payment would have gone down by another $200 or so. Our main goal was bringing the loan current.

Hubby just called to tell me that his friend's wife did just exactly this a month ago and they just signed paperwork for a permanent in house loan mod that brought their payments of $2200 per mon down to $777!!! I need that woman's help. lol!!

[kourtini]

You were right, it's not a permanent change, but it's like you say - the interest rate will top out at less than they were paying before. Still a pretty good deal imo. I talk to our atty this afternoon and he says he will fax Bank of America authorization to negotiate with us during our bankruptcy. I don't have much hope for a loan mod, but I figure it's a good last ditch effort. We have 3 kids and I honestly want to cry when I think about packing all our stuff up and moving. Not because I'm worried about where we will live. We already found rental homes in our area that are more than happy to rent to us. (Seems as though everyone is in our shoes right now *sigh*) But mostly because it sounds so draining and stressful. So we will start calling them everyday and trying to get them to work something out with us. After we are discharged from bankruptcy, we will have no debt besides our car payment and if we could get them to just lower the monthly payment, we would be home free. So to speak. ;) Honestly.... an evil part of me is excited to call and drive THEM nuts for a change.

[SMinGA]

No harm in that, LOL. I actually take a little pleasure out of (unsecured) collection calls now - knowing they really can't do anything to me.

Of course, once my credit report updates to show my mortgage is up to date (was still reporting late, the mod just finished updating on my BofA online acct info) I can no longer say "how could I possibly pay you when my mortgage is X months behind"? Even so they should know I mean business when I say we'll ultimately be filing ch. 13. (Since we filed and dismissed before...)

[nervous1]

Hi - can I jump in on this thread?

I applied for a loan mod with BoA on June 9. Rec'd paperwork a week ago saying that that the application was incomplete - they needed back bank stmts and income verification. (Never mind that the original paperwork did not ask for either one of those.) Are they dragging this out or what?

I sent bank stmts. from 2 diff. banks. Problem with income is that our only income is Ebay. I prepared a spreadsheet with our last 3 months of earnings/expenses. (They're probably trying to figure out how we've survived.)

Now.....my question.

Our mortgage is with BoA. So is one of my cking accounts. So is one of my cc's with the pmt. due 7/5. If I don't pay, will they take it out of my cking account automatically? I would close the cking. acct. and move it to another account with a local bank that I just opened up on Monday, but the loan mod paperwork has copies of the statements.

Could I close the cking acct. with BoA, move it to the new bank and then send copies of that stmt.?

I should have planned this all out better.

[kourtini]

So I spent ALL DAY on the phone with B of A yesterday. ALL DAY. First they tried to get me to pay the total balance of the loan... (hahahahahaha... yeah ok).... then I told them I was filing chapter 7 bankruptcy and that I WAS in the HAM program and making trial payments when Recon Trust came and taped a Notice of Trustee Sale to our front door. I explained to them that there was no way I was going to be giving them any more money at all if they are planning to just turn around and sell my home at auction right out from underneath us during the modification process. (That sale will be postponed anyways because we filed bankruptcy) Then the guy on the phone looked into our account and said that Recon Trust is seriously ahead of schedule and that they don't know what's actually going on because B of A has no future sale date in sight. He says that sometimes that company gets ahead of the actual bank. But B of A is so behind with their foreclosures right now... he said it would be at least 6 months before there would be an actual trustee sale and that is if we do nothing to stop it. Now they are trying to convince us to follow through with our HAM trial payments. Of course at this point, we have missed the June trial payment, which would have been our second one. I mentioned this to them and they said all we need to do is have a payment sent in for June, even if we send it in July. He said the important thing is that when the mod paperwork goes into review, there are 3 payments recorded. Is this guy full of crap?? All I have been hearing is that you cannot even be one day late on your trial payments or you are declined. I think I will call back today and talk to someone else about that. Not sure what to do... but happy to know we don't need to be out in just a couple of months either way.

[SMinGA]

Kourtini, I know nothing of the HAMP program. My dealings were strictly inhouse mod. Have horror stories about HAMP - but then it seems only natural that anything having the slightest to do with a federal program would be troublesome. I started by calling the retention dept and asking specifically about inhouse options, I knew I did not qualify for HAMP.

But... Everytime I called in after starting the process, the person who came on the line would go thru the standard 'are you still living in the home, are you calling to pay your balance due of $X' and I'd have to tell them I was working on a mod. Then they'd check notes, confirm the account was on hold regarding collection activity, etc. The other day when I called to find out what address for the July payment it was REALLY annoying. Did not try to collect a past due balance from me, but when asked to confirm phone # they had a wrong # for me. How, I don't know. I have not changed #s in years & each time I've called in recently they've confirmed. So he corrected and then asked me to confirm my address. I got kind of PO'd - said how could BofA possibly NOT know the address for which they held the mortgage???

Nervous1-I don't know for sure, but it might not hurt to go ahead and open a checking with a bank unrelated to any of your debts. Better safe than sorry approach?

As to document verification - when I spoke to the retention dept by phone he advised me to send in check stubs, bank statements, tax returns, a hardship letter summarizing why we needed a mod, and a list of expenses for budget purposes. I faxed it all, writing my loan # on each page. The only request for a refax was regarding tax returns. Originally I just sent the 1040, they wanted all supporting schedules.

But we are employed, W-2 wages. I believe if self employed, instead of stubs they would have wanted 2 quarters of P&L statements. If you can't verify stable income, I highly doubt you'll get a mod. They want to see that modifying the mortgage will make enough difference that you can stay in the home. They're probably not going to modify if it looks like the bigger problem is a lack of stable income.