Modification after bankruptcy questions

[willsurvive]

Bank of America sent us a loan modification yesterday via Fed Ex. First off, let me say we were prepared to walk (in fact planning on it). The offer they sent is more than we ever hoped for and making us seriously contemplate their offer. At this point it is lower than what we could rent a reasonable place for. I do have a few questions. I'd especially like advice from anyone that has a loan mod currently.

1) At the end of the "terms" of the loan mod, it has an additional page titled "Modification Bankruptcy Disclosure Rider". It reads, "This modification bankruptcy disclosure rider, effective on the 11th day of August 2010, is incorporated into and shall be deemed to amend and supplement the Loan Modification Agreement of the same date made by (me and my husband) and BAC Home Loans Servicing, LP (lender) covering the property described in the Loan Modification Agreement (LMA) located at (property address). Borrower understands and acknowledges that if Borrower breaches any of the terms and conditions of the Loan Modification Agreement, including but not limited to timely making the payments described in the LMA, that lender has a right to foreclose the property in accordance with the terms and conditions of the underlying Security Instruments. In addition to the covenants and agreements made in the LMA, the borrower and lender covenant and agree as follows: 1. Borrower was discharged in a Chapter 7 bankruptcy proceeding after the execution of the note and security instruments; 2. Borrower has or reasonably expects to have the ability to make the payments specified in the LMA, and 3. The LMA was entered into consensually and it does not affect the discharge of Borrower's personal liability on the Note. My question is this, does this mean that should we not be able to make the payments in the future that it will foreclose, but we won't be held liable for the debt later on (because of the discharged bankruptcy)?

2) For those that have modified, will I start receiving statements to be able to make timely payments, etc? What about online access to my account?

Both dh and I are seriously shocked and a little leery. We had seriously said goodbye in our hearts to this home. We have a few days to make the decision, but let me say we are hopeful.

Thanks for any and all help! This forum has helped me in a very dark period of my life.

[SMinGA]

From what I read of the disclaimer: it says if you fail to pay, they can foreclose (which is the only legal way to reclaim ownership) but that the modification does not change the discharged state of your loan. Meaning you can still walk away and owe nothing.

As to online access, statements, etc. I don't know. More than likely yes since they stopped due to the automatic stay which is now over.

[sofarsogood2]

Congrats on the mod. It appears that the loan remains discharged.

Was this a HAMP or in house mod? Trying to work with my lender on an in house, but so far, they only want to do HAMP- which I won't do. Making payments on a vague "promise" of maybe getting a mod, only to be foreclosed on later, doesn't seem like a good financial decision. If they want to make a deal, I want it up front and in writing, no trial period.

[willsurvive]

From what I can tell it's an in house mod. There's nothing on the paper that says "HAMP". The paperwork I filled out a month ago did say "HAMP" on it, so I was surprised that this didn't. Again, very much in shock and feel ridiculously blessed at the same time. I hear so many people begging for mods, and we just applied thinking there was NO way they would approve us for anything. Thanks everyone.

[midnight]

Congrats! We finally got an in-house mod as well, which unfortunately wasn't that great but we took it after 15 months of waiting. Hope we can refi in a couple years. If you got good terms, go for it!

[SMinGA]

I completed an inhouse mod w/ BofA earlier this year - did not expect results until I saw confirmation that it was real though. Started the process w/ a phone call in mid-April and started making my new payment in July. (Had to send back signed/notarized paperwork by June 1 w/ certified funds = 1 mo new payment. Mostly went to interest.)

So from personal experience, inhouse mods can happen and be less red tape than the horror stories I have heard for HAMP.

[willsurvive]

We have to send back our mod notarized with the 1st payment by Saturday (they provided an overnight FedEx envelope prepaid). How do you know that BofA actually signs their end of the contract (it states that in order to be valid, they must sign too)? Sorry we are just VERY untrusting of banks because of the foreclosure crisis going on. . . .

[Pandora]

We have to send back our mod notarized with the 1st payment by Saturday (they provided an overnight FedEx envelope prepaid). How do you know that BofA actually signs their end of the contract (it states that in order to be valid, they must sign too)? Sorry we are just VERY untrusting of banks because of the foreclosure crisis going on. . . .

Just a suggestion from someone thats been through a mod as well:

Make a copy of the return pre-paid envelope because it has the tracking number on it - that way you can track it from your end. If the bank says they never got it - you can log into FED EX and provide a complete history of its progress, right down to who signed for it. Its also good to keep a copy of the original envelope and tracking that the documents were sent to you in. Keep everything.

Thats one way to keep the ball in your court.

[SMinGA]

Personal experience... Don't wait, get it out today if possible. The 'overnight' envelope was delayed by FedEx, took 2 days to be delivered.

The $ did not post to my account right away, the explanation I was given is it went into a holding account of sorts where they store 'partial' payments normally until enough is there for a 'full payment'. On June 9th (docs were received May 28th by BofA and then Monday was a holiday) after I called again - the funds showed on my online transaction history but were still not posted to interest, etc. Showed misc. At this point I was still not able to access the pay online link thru the website. I called and confirmed the payment address for my July 1st payment, made it thru online billpay and at first it did not show up either in my transactions. Called 2-3 days later, talked to someone who said he'd manually move it over. Within a few days - all was fixed. By mid July all was done: certified funds payment applied to interest, the July payment was applied to principal/interest/escrow and my online info was changed to show new balance, new rate, new monthly payment amount.

Call every 2-3 weeks for a status check, just to keep them active. But apparently they send the paperwork to the investor to be signed and then it goes back to BofA. It will take 4-8 weeks for things to change online for you.

I was distrustful of the whole thing, expecting someone to call and say there was a problem or something had been miscalculated or we didn't qualify afterall. Didn't get excited about the whole thing UNTIL I saw the updated account info online. Now they have even started reporting my mortgage paid as agreed, no past due balance to the credit bureaus. (That happened mid July also.)

We have to send back our mod notarized with the 1st payment by Saturday (they provided an overnight FedEx envelope prepaid). How do you know that BofA actually signs their end of the contract (it states that in order to be valid, they must sign too)? Sorry we are just VERY untrusting of banks because of the foreclosure crisis going on. . . .

[SMinGA]

One other thing, to warn you about, in case your situation is like mine...

I had only made 3 payments since the last set of taxes & insurance were paid, and my next taxes & insurance is coming up in the next couple of months. My escrow account was looking pretty bleak.

When they did the mod, they added missed interest back into the principal but did NOT account for the missed escrow payments. So last month, they evaluated my escrow account and (not a surprise) noticed it was going to be short. I had the option of paying a lump sum to balance escrow, or increasing my escrow payment for the next year to fix it.

[willsurvive]

Thanks so much for your personal experience. On the mod, we have late payments and interest in there, and another section of missed escrow payments of $8,000. I'm assuming that is what yours didn't have? I just want no surprises, but I'm not sure it's possible, lol!

I made the mistake of calling BofA about the mod and I was transferred several times, dropped phone calls 2x, transferred to Team Hope, and no one was helpful in the least. One guy said the modification was only a trial period and no guarantee that it would be accepted. I then told him the name of the paperwork was "Loan Modification Agreement" with a "Modification after Bankruptcy Disclosure" and it was requesting a notary to sign it and send it back. That stopped him in his tracks and he sent me to another department to which was no help at all. I really think no one knows what's going on, so my gut says sign it, send the first payment, and go with it. As a side note, was anyone else in foreclosure with a sale date, and then receive a loan mod? Did it stop your foreclosure sale date and everything? Our sale date is Nov. 1st, so if we go with this, I want that to stop immediately. Thanks!

[SMinGA]

Team Hope, I think, is just HAMP so not what you need.

I always ended up in the retention department I think - where they started with the 'you're $X past due, are you still living in the house' routine, and I'd tell them I'm in the middle of an inhouse mod. They'd look thru notes, and then see the details...

Sounds like they ARE addressing the escrow in your mod then. I don't know if they simply overlooked it for me, or if the amount was low enough to not bother. Overall, its probably best for me that they did not capitalize the escrow adjustment. My correct escrow payments monthly are only about $162 now...

[SMinGA]

just noticed the sale date question.

I was not that far along. We were about to go into the FC process (I think) when we filed ch. 13 in Dec. '09, then we dismissed it in March of this year. A month later, as soon as my account came out of the BK department at BofA I started talking to them about the mod.

But... I don't think the Nov. 1 foreclosure sale will be an issue. I was told BofA stops collection/foreclosure proceedings while being processed for a mod.

[willsurvive]

You've been very helpful! It's nice hearing from someone that's been there done that (and that the banks have really helped a live person, lol). I've taken the advice, copying the FedEx label, copying all the paperwork. I won't freak out if my payment doesn't show up nor my online account for awhile. Deep breaths, here we go

[martha]

I have a modified loan agreement but it has been nothing but a nightmare. Cb modified it in May and now they have sent me an "Acceleration Warning ( for intent to foreclosure) and states in the letter if I don't pay the money owed which was added to the principal balance by the end of this month they will accelerate the forclosure procedure. We have made each one of the modified payments but they still have the old information in our online account, some representatives have told me give them more time.
Can they do foreclosure in our house even though we have abide by the conditions and terms in the modified loan agreement?. The bank has not.