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Old 12-16-2008, 07:18 AM
 
Location: MID ATLANTIC
8,669 posts, read 22,853,798 times
Reputation: 10490

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If you are surviving on Buyer's Protection Plan, be aware it won't cover taxes and insurance - that's just a side note before I forget.

The harsh reality is if you haven't been late on your mortgage, your request for modification will be on the bottom of the pile. BofA is participating heavily in the Hope 4 Homeowners, which will reduce your loan to 90% of value in return for a share of the equity in the future - a sliding scale depending upon how long you own the home. It's a harsh work out.

As a former BofA employee, your tale won't really move them. Miss a few payments and if it can be shown you are an employed customer worth working an arrangement in order to save the home, you may receive a modification. They are paying their attorneys a fortune......they are not going to pay them to mod a loan that is going to go south in one year. (Not in light of the headlines showing 50% of modified loans are once again pre-foreclosure). The fact that your loan went delinquent DESPITE Buyer's Protection Plan will make it a real hard sell.

Speaking bluntly: You need to decide if you want to stay in the home without a modification. Your BPP will not cross your hands, it just cancels the payment, leaving you to pay the tax and insurance portion. Two years out is a lifetime by today's standards, that fact won't register a blip in your case. Seriously, decide if you want the home and then move heaven and earth to support your decision to try to stay or go.

If you lose the home, it can (and will) get worse before it gets better, so think it through. We are seeing people now losing security clearances or unable to get jobs in the DC area, due to credit problems. Finding rentals haven't been easy either, many are having to pay 6 months up front (only to have their landlord walk away from the home, but that's another story). We are frequently seeing guidelines being updated to reflect what will be accepted on new loans when there is a short sale or short refi in a borrower's credit history. The credit is the soul of how a consumer is charged for every day items, in every day life.

And a final side note: If anyone banks where their mortgage is held, don't be asking for a modification and then have a sizable asset account on deposit with the same bank (or a recent sizable account). It's really hard to take a request for modification seriously when they pull up your bank activity and they see 5 or 6 figures on the asset side.
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Old 12-16-2008, 11:14 AM
 
Location: WA
5,641 posts, read 24,904,544 times
Reputation: 6574
Quote:
Originally Posted by SmartMoney View Post
...
Miss a few payments and if it can be shown you are an employed customer worth working an arrangement in order to save the home, you may receive a modification.
...
True. I have spoken with a number of remediation people and it seems the two requirements for help is being 90 days off of current and some kind of employment.

Too bad too... there are people that are smart enough to see a default coming, can put together a plan to avoid it with help from lenders, but simply get no consideration.
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Old 12-16-2008, 05:56 PM
 
Location: MID ATLANTIC
8,669 posts, read 22,853,798 times
Reputation: 10490
Quote:
Originally Posted by cdelena View Post
True. I have spoken with a number of remediation people and it seems the two requirements for help is being 90 days off of current and some kind of employment.

Too bad too... there are people that are smart enough to see a default coming, can put together a plan to avoid it with help from lenders, but simply get no consideration.

Oh, I am not disputing that reasoning at all. After all, if you see you are about to be hit with a freight train two miles out, you would want to see if you could avert the collision before you are 20 feet out. It makes sense. Unfortunately, there exists a personnel shortage to deal with those loans that are being turned over to the attorneys for foreclosure proceedings. Untrained temps are answering the telephones. I have no doubt they have a minimum checklist before passing go to the next level.

Why would anyone spend $1000s (in some cases 100's of 1000's) modifying a loan for someone that is not employed and has a very high chance of being back for foreclosure? How do you convince them you won't be back, and next time for delinquent payments? Why should the banks go through the expense twice? Included in their criteria is an application package. If the homeowner cannot qualify for the new mortgage, why modify? What purpose does it serve?

I am not denying you have valid concerns. I just can't get the perspective of the bank to agree with the direction you propose, a maybe solution. By the way, as a stockholder, I would be livid if a bank I was invested in made costly negotiations without a firmer resolution.
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