For the last year I have been working with a good friend of mine in order to get her Bank of America first mortgage modified. And they finally approved the modification. Payments are going from around $1800 to $1300.

To make a long story short, your income, how much you owe and other factors doesn't determine whether you get a modification or not. Persistance is key with dealing with these people. Another thing key is putting pressure on the bank, through complaints, repeated phone calls and letters. You have to realize that Bank of America really doesn't want to approve any modificiations, at least in California and most of the ones they do approve are completely inadequate. So it requires a lot in order to get them to approve an adequate one.

I don't do loan modifications professionally, but if anyone is struggling with Bank of America, PM me.

Loan Mods are just a delay tactic by the bank to skim more money from the homeowners. Most people will not qualify for a loan modification, after continuing to pay and waiting 6 months. Of the few that do make it through, 58% default again within the year. The bank already knows this fact.

I have been conditioned to think that BOA will screw anything up that they touch. I equate BOA with a gov-mint entity....they are equally inept.

Originally posted by Ricky Ostrom:
Loan Mods are just a delay tactic by the bank to skim more money from the homeowners. Most people will not qualify for a loan modification, after continuing to pay and waiting 6 months. Of the few that do make it through, 58% default again within the year. The bank already knows this fact.

From your description, it sounds more like homeowners ripping off banks than the other way around.

Congratulations Adam on getting the modification for them. Hopefully they will be able to make the payments and it will work for them. As Ricky said, most end up failing within a year. Hopefully your friend will not be one of them.

Originally posted by Ricky Ostrom:
Loan Mods are just a delay tactic by the bank to skim more money from the homeowners. Most people will not qualify for a loan modification, after continuing to pay and waiting 6 months. Of the few that do make it through, 58% default again within the year. The bank already knows this fact.

You are right. Bank of America is extremely dishonest. For the record, some of the "loan modifications" Bank of America approves actually involve the homeowner's payment staying the same or even going higher. The first "loan modification" that my friend was offered would force her to pay more for her mortgage than she was paying before she started the whole process.

In fact the only way I got an actual modification for her is by reaching out through my Congressman, to the Office of the Controller of the Currency. In turn, they reached out to Bank of America and voila, the loan was modified.

As I said before, they actually don't want to do modifications. And I understand the free market argument, that homeowners are ripping off the bank, that they made a contract, etc. However, in my book, that argument became invalid in late 2008 when the banks went to DC hat in hand and took 700 billion to save them from impending disaster. Money which they were given with the promise, that, among other things, they would work with homeowners in order to modify their mortgage terms and make these mortgages more affordable.

I concur.

The problem was there was no regulation of the banks for the bailout money that was lent.

The banks were supposed to increase lending and then use the money to offset loan losses for providing loan workouts to stem foreclosures.

NEVER HAPPENED

Instead just like the government program banks instead made loan guidelines they know 90 plus percent wouldn't qualify for.

So they weren't making loans,only doing trial loan mods,and what they were and are still REALLY doing is taking the bailout money and buying distressed notes and properties from other banks.

This way they offset there losses by the upside in their purchases against their books.The problem is the funds were never intended for this purchase.

I wish someone would give me billions of dollars and I could do with it what I pleased.

Most servicing companies do not want to foreclose as they stop making servicing fees on the loan.

The reason most early loan mods failed is because the mods were something that worked for the banks and not the owners of the homes.

We have to look at the bigger picture to comprehend what's happening in this area of the financial world.

The Federally insured banks were getting more money (deposits) at lower interest rates than they would have in a "free" market situation. So they had to find a profitable place to lend it. With more money chasing fewer profitable investment opportunities (loans), the banks lowered their lending criteria substantially, and attempted to make up the increase in default rate by raising interest rates on these riskier loans to substantially above the prime risk rates.

This easy and plentiful loan situation led to a situation of having more money chasing the same amount of product, and hence a significant rise in housing prices. As all artificially inflated prices do, they fell back to a real economic justifiable level - when the defaults turned out greater than the banks anticipated. It all fed on each other, prices came spiralling down, defaults way up - and government response was bailout money - worry about the consequences of that later - like when the other party is in power!

We are missing the key cause of the whole scenario. Banks were able to receive much more savings/investment money at lower interest than they would have in a free market situation, because of federal bank deposit insurance. We often see the benefits of government interference in the economy, but not the long term negative consequences. BTW, if you think federal deposit insurance is a neccessity for the economy, be advised that Switzerland does not insure bank deposits. Instead Swiss banks compete on liquidity, balance sheet strength and transparancy.

Just to let you guys know my wife has a 2nd lien with BofA and we are in a short sale transaction on our home. We will find out in about 2 weeks whether BOFA will come through to approve or counter on the offer on this.

I agree wholeheartedly with Byran in them being "inept" good choice of words and other postings as well..

Will let you know here on BP what happens on this..

I work with an investor who also buys property via short sale. He won't touch it if the loan is with Bank of America.
Sounds like we aren't the only ones who aren't impressed by the way they handle things!

Well believe it or not Bank of America did approve the 2nd lien for a short sale I still can not believe it.

I believe the reason BofA dealt on this SS is b/c we had escrow open after a viable offer on the property plus we have a good law firm who specializes on these type transactions.I think also that EMC our first lender may have contacted them with a offer for the 2nd since they know if it went to foreclosure they would have nothing..

With all that is happening in the lending market and foreclosure debacle maybe this would make sense for them to be more sensible in their business..

We are actually holding on the BPO ordered by EMC the 1st lien holder so that should be happening soon.

As Jim Nabors as Gomer Pyle so eloquently said "Surprise Surprise"!!!

Adam, I am also going through a similar situtaion can you give me some pointers on what to say when dealing with BOA?

You are going to have to play very hard ball with Bank of America. Be prepared for to call them at least twice a week for some months. The loan modification for my friend took a year. Never take no for an answer from B of A. Continue to pressure the bank and you will achieve victory.

Start by calling the office of the CEO. The phone number is 704-386-5687. If that number is busy, you can call the numbers for Bank of America headquarters. The number is 704-386-5972. When you get the operator, you ask for the office of the CEO. When you get someone on the phone, explain that you need someone to help you modify the mortgage and nobody else was willing to work with you. You have been a customer with the bank for a long time and really want to work with them, but in all honesty, you are facing financial issues and you don't want to be forced to file for bankruptcy. You also have to explain that you want to stay in your home but you need a heavy reduction in the payment, at least 50%. I know that they most likely aren't going to give that to you, but you have to propose something. They will transfer you to a manager who should start the ball rolling.

However, even with a manager helping you, it is best, at the same time to reach out to government officials and agencies so that they can apply pressure on Bank of America.

You should start by reaching out to your senator and congressperson about this situation. Write them letters and request assistance. Also file a complaint on Bank of America with the OCC, Office of the Comptroller of the Currency which is the regulator of Bank of America.

One tactic which I used while helping my friend is in addition to filling a complaint myself, I reached out to one of the aide's to her congressman. I got that person to complain to the OCC about Bank of America and our situation.

Drumming up external pressure on this bank is KEY. As I said before, they do not want to help you or any homeowner but if you generate enough pressure through complaints they will eventually act. But be prepared for a battle.

Originally posted by Mark Haffeman:
Adam, I am also going through a similar situtaion can you give me some pointers on what to say when dealing with BOA?

Don, this isn't really the case. The loan situation did not have to do with cheap deposits and cheap deposits don't have anything to do with FDIC backing - I don't think.

You could argue that FDIC insurance makes bank deposits cheaper because it makes them less risky, and you would probably be right, but there were no changes in the FDIC policies in the lead up to the mortage mess that would have caused the abundance of crappy loans to be made.

The reason subprime mortages got so popular was that banks started making fees on packaging and selling pools of mortgages. The more they could create, the more fees they could make by packaging and selling them.

The banks doubled down by further selling CDS - credit default swaps, on these loans, basically taking back the risk of their default. They thought the process was riskless because they thought home prices wouldn't fall and default rates would stay low, but they didn't realize they were over inflating home prices.

Every one had a hand it this - mortgage originators were drunk and stupid and, in some cases very dishonest, and made the loans. They didn't care because they weren't keeping the paper - just sending it on to the investment banks.

IBs didn't care because they were pacaking and selling the loans - they only cared about fees. The people making the trades have a very short term profit veiw. They thought they didn't care because they weren't keeping the paper either, but they go themselves back in the deal with CDS.

Banks bullied the rating agencies into giving AAA rating on the paper - this is probably the biggest breakdown in the whole process and I personally hold Moody's and S&P the most responsible for the mess. They could have stopped it, but they were getting fees from the banks for rating the crap.

Investors, Pension funds, and other places were funding it all by buying the AAA paper. They are at fault because they were trusting the rating agency's rating without doing their own underwriting.

Finally, the borrowers have some responsibility as well. You can't borrow $700K when you have no income. They shouldn't have ever been allowed to do it by any bank, but as mentioned above, it was.

Check out the book "The Big Short" by Michael Lewis. It details the stories of a couple of guys that figured out a way to short the mortgages in the hight of the bubble.

I'm not smart enough to understand it all, but I don't think that cheap deposits or FDIC insurance on those depoits had anything to do with it.

Originally posted by Don Konipol:
We have to look at the bigger picture to comprehend what's happening in this area of the financial world.

The Federally insured banks were getting more money (deposits) at lower interest rates than they would have in a "free" market situation. So they had to find a profitable place to lend it. With more money chasing fewer profitable investment opportunities (loans), the banks lowered their lending criteria substantially, and attempted to make up the increase in default rate by raising interest rates on these riskier loans to substantially above the prime risk rates.

This easy and plentiful loan situation led to a situation of having more money chasing the same amount of product, and hence a significant rise in housing prices. As all artificially inflated prices do, they fell back to a real economic justifiable level - when the defaults turned out greater than the banks anticipated. It all fed on each other, prices came spiralling down, defaults way up - and government response was bailout money - worry about the consequences of that later - like when the other party is in power!

We are missing the key cause of the whole scenario. Banks were able to receive much more savings/investment money at lower interest than they would have in a free market situation, because of federal bank deposit insurance. We often see the benefits of government interference in the economy, but not the long term negative consequences. BTW, if you think federal deposit insurance is a neccessity for the economy, be advised that Switzerland does not insure bank deposits. Instead Swiss banks compete on liquidity, balance sheet strength and transparancy.

Adam could really use your help BoA is screwing with me has been for 2 years had to hire a lawyer and all
THANKS

Originally posted by Adam Harrison:

Originally posted by Ricky Ostrom:
Loan Mods are just a delay tactic by the bank to skim more money from the homeowners. Most people will not qualify for a loan modification, after continuing to pay and waiting 6 months. Of the few that do make it through, 58% default again within the year. The bank already knows this fact.

You are right. Bank of America is extremely dishonest. For the record, some of the "loan modifications" Bank of America approves actually involve the homeowner's payment staying the same or even going higher. The first "loan modification" that my friend was offered would force her to pay more for her mortgage than she was paying before she started the whole process.

In fact the only way I got an actual modification for her is by reaching out through my Congressman, to the Office of the Controller of the Currency. In turn, they reached out to Bank of America and voila, the loan was modified.

As I said before, they actually don't want to do modifications. And I understand the free market argument, that homeowners are ripping off the bank, that they made a contract, etc. However, in my book, that argument became invalid in late 2008 when the banks went to DC hat in hand and took 700 billion to save them from impending disaster. Money which they were given with the promise, that, among other things, they would work with homeowners in order to modify their mortgage terms and make these mortgages more affordable.

Adam,

Thats the way to go, everyone listens to Higher power. :P

Adam,

I read your whole post. Right now they are currently offering me a deed in lieu - but I haven't paid in 3 years. I dont care waht my new payment is as long as they would let me start paying on it again. I dont know what to do because I spent $1000 on a laywer just to have them attempt a mod - now they want another $500 and I just feel like they are useless. How do I get them to hear my on my own? Do I even have a chance? Any help is greatly appreciated.

Grace

Just closed on a short sale approved by B of A, smooth, closed on time.

I am going through this exact thing. Could you please email me some of the letters you sent to the Senaters and Concressmen? I am filing a complaint with the Comptroller of the Currency today. Thank you for the post!

As a retired financial planner I have had more than a little experience helping those who have faced foreclose. The word gets around that I have helped friends and relatives negotiate modification with their lender. And the price is right, I help for free. I have found the one common ingredient all the mortgage servicers have is incompetence.

In almost every case documents which are sent are lost, or when they are received they are ignored until the financials have to be sent again because they are out of date.

The contact people are not qualified to do anything but check off boxes and forward the material to those who will make final decisions and negotiate is a term that I use loosely as there is very little real negotiating taking place.

Persistence is the only solution to those seeking a modification. You must present your facts in a manner that the lenders representatives can understand. They typically have s check list of items that they send to be reviewed and when all the items are checked only then does anyone really look at the case.

Congratulations on your success with Bank Of America. Recently they have had to settle a law suit to compensate those who were hurt by their incompetence and now they have used it to delay a new set of modification by having many modification requests that are in their pipeline to have to start all over again. Few have the ability to persist for 6mos to a year and will fail not because they cant qualify but because they just give up.

I am dealing with BOA now on trying to get a loan modification, I have been trying to get this done since 2011, they are definitally giving me the run around, first they say I dont provide proper information and then they just close case without me knowing anything, so I try again and then they tell me I dont qualify then they say I do. I just dont understand. Please if anyone can give me some advice please I need it. I dont wont to lose my home.

Citibank contacted me a couple of months about refinancing the mortgage on one of my SFH rentals through the HARP program. They lowered my rate from 5.875 to 4.5. About $160/month more cash flow. No closing costs. I didn't even ask them for it so I was quite pleasantly surprised when it came out of the blue. I was even more surprised because I have never been late on a payment and am not in any sort of financial distress.

Melissa document EVERYTHING mailed and EVERY phone conversation. Everything gets mailed to them via certified mail and return receipt (where someone at BOA signs for it). Also, I would hire an attorney ASAP that specializes in these things. They aren't as eager to screw around with attorneys as they are with homeowners trying to go it alone. Good luck.

Does anyone have a copy of the letters to the congressmen or senators that they've used? Help me here please...

I have a Freddie. 4-unit apt building that I used to live in but I don't live there anymore. I'm underwater and its bleeding about $8k cash flow per year.

I called the CEO's office
They said call 800-669-6607
Transferred to default prevention
Making Homes Affordable is not available since its not OO

I called 3. 877-422-1761 Home Retention Services Inc. Sent to: 800-669-6650 another CS line.

Does anyone have the right contact number for this?

Thanks!
Justin