Oh, I forgot to mention this one last thought, if your numbers worked out in such a way that you could possibly cram down (strip the lien) on the second mortgage by filing for bankruptcy and presented BofA with that scenario, than I could see them taking the extinguishment option and at least get something (and it would come from the Treasury, not you...bonus!). I guess we will just have to play the waiting game some more and see what happens. I hope that second lien modifications will be included on the monthly progress reports. I'm curious to see if they will be and whether they will contain details on how many modified vs extinguished.
PLEASE ONLY POST - Articles, Official Letters, Testimony, Rules and Regs. Moe - perhaps a Sticky is
- Thread starter THANKS2U
- Start date
Just keep in mind, that if you get the MHA mod, you may have principal forbearance (deferred portion of principal). That balloon payment will be due at the end of the loan term, OR when you refi or sell the house. So, if your loan mod requires this, it may change your long term plans.
This is true.... My hope would be that in 5 years or so, that I will be in a position to be able to sell the home (without a short sale) and essentially start over with a clean slate...
Have a nice evening.
Skipper
Skipper - question for you. I am using BofA's expense worksheet I found online. I'm altering the income section (asks for net, so am changing it to gross monthly). DH gets paid 75K/yr. Pay checks issued every other week, listing gross pay at $2884.62. Obviously, some months will be only 2 pay checks and others will be 3 of them. If I take his annual pay divided by 12, it is $6250/mo. However, if I use the pay stubs to determine the amount per month (2884 * 2 = 5768), this is a big difference. So my question is, how do you think BofA is actually calculating the monthly gross income? Any thoughts on this?
CW California
LoanSafe Member
BofA will take the 75K divided by 12 months for the monthly.
Thanks CW! I feel a little better now, and sleepy! Off to bed for me.
hope67
LoanSafe Member
ama125, the calculation for the 1st could be ok to modify it, but the 2nd is a whole new ball game. For example, due to a low property market value the 2nd could be totally an unsecured loan! In addition, as I mentioned earlier they will have an estimate as to the probability of the borrower defaulting again within a certain period of time.
I think they will use some kind of a calculator to determine whether to modify or extinguish the 2nd.
luvmyhorse
LoanSafe Member
ama125 after you apply can you tell me how they use the net? I am self imployed and I have a lot of tax deductions, including my gigantic mortgage and re taxes.... I won't have enough income if they use my net. I keep searching for this information but can't find it.
will they add back in some of my deductions, like mortgage interest, so I at least have an income they will work with?
will they add back in some of my deductions, like mortgage interest, so I at least have an income they will work with?
They use gross income, not net. This is from the Treasury guidelines:
Monthly Gross Income:
The borrower’s Monthly Gross Income is the amount before any payroll deductions includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payment, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance polices, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and other income.
Monthly net income can be used for preliminary screening and qualification. If used, the servicer will need to multiply net income by 1.25 to get to an estimate of Monthly Gross Income.
Came across this personal debt evaluator tool: Evaluate Your Debt - MSN Money
Could be useful in determining your DTI before and after modification.
Could be useful in determining your DTI before and after modification.
CW California
LoanSafe Member
Ama
Here is the article about the original Hope Program that Moe had orginally on the website.
HOPE for Homeowners - not dead yet - Mar. 25, 2009
Here is the article about the original Hope Program that Moe had orginally on the website.
HOPE for Homeowners - not dead yet - Mar. 25, 2009
THANKS2U
LoanSafe Member
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Another avenue to pursue for voicing the UGLY TRUTHS about the corrupt executives of B of A, as well as, whistle blowing about the bottom feeding negotiating employees at Bank of America, who practice constant Fiduciary NEGLIGENCES ! In order to destroy good faith borrowers and watch us wither away off their cooked up balancing books....
U.S. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)
U.S. Office of the SIGTARP : Contact Us : SIGTARP Hotline
Our voices must be constanly heard, otherwise, we will be constanly ignored !!!
==================================================================================================================================================
Another avenue to pursue for voicing the UGLY TRUTHS about the corrupt executives of B of A, as well as, whistle blowing about the bottom feeding negotiating employees at Bank of America, who practice constant Fiduciary NEGLIGENCES ! In order to destroy good faith borrowers and watch us wither away off their cooked up balancing books....
U.S. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)
U.S. Office of the SIGTARP : Contact Us : SIGTARP Hotline
Our voices must be constanly heard, otherwise, we will be constanly ignored !!!
==================================================================================================================================================
Hey Everyone,
Here is an article on H4H and what they are doing to update it:
RPT-UPDATE 1-U.S. plans third redo of key housing aid effort | Reuters
Here is an article on H4H and what they are doing to update it:
RPT-UPDATE 1-U.S. plans third redo of key housing aid effort | Reuters
Thanks for the contact information. I sent an email and plan on calling them tomorrow. The more people let them know what they are going through on a personal level the better.
CW California
LoanSafe Member
August 20, 2009
Countrywide Loses Ruling in Loan Suit
By GRETCHEN MORGENSON
A federal judge in Manhattan has rejected an argument by Countrywide Financial seeking certain protections from investor lawsuits under new legislation intended to encourage modifications of home loans.
Countrywide, the big mortgage company, had argued that the legislation automatically voided its pledges to buy back loans from investors if those loans were modified for troubled borrowers.
The ruling is a win for holders of mortgage-backed securities who sued Countrywide in December after the company, now a unit of Bank of America, agreed to modify thousands of loans in a settlement with state attorneys general. The opinion, by Judge Richard J. Holwell of Federal District Court in New York, was made public on Tuesday.
The case against Countrywide is being closely watched by pension funds, insurance companies and other investors in mortgage securities who contend that loan servicing companies that agree to change the terms of mortgages are breaching contractual obligations to owners of those loans.
Investors who own mortgage securities receive interest and principal payments from borrowers over the life of the loans. When servicing companies modify those loans, investor payments are typically reduced.
“I view this as an opening salvo and a demonstration that investors do have contractual rights, even when it is politically unpopular,” said William A. Frey, one of the investors who brought the lawsuit. “This is ultimately going to be one of many legal battles over who should pay the hundreds of billions of dollars in losses on mortgages.”
Bank of America, which took over servicing of the investors’ loans when it bought Countrywide in 2008, is defending the case. It argued that the matter belonged in federal court and that any contractual obligations to repurchase modified loans were trumped by the Helping Families Save Their Homes Act of 2009. Under that law, servicing companies that agree to modify loans receive some protection from liability arising from the loan changes.
Judge Holwell ruled that the immunity granted under the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage securities contracts. The investors must prove that Countrywide’s pooling and servicing agreement covering their loans does indeed require it to repurchase mortgages the bank modifies, the judge said, ruling that the case belongs in state court.
Shirley Norton, a spokeswoman for Bank of America, said it was reviewing the order and considering its options. “The court did not rule that the safe harbor is inapplicable,” Ms. Norton said, merely that it did not fall under federal jurisdiction.
Investors’ lawyers hailed the decision.
“This is a first step in a decision by a federal judge that says even after the servicers’ safe harbor was enacted and even after all the wrangling in Congress, we are still going to allow people to enforce their contract rights when it is appropriate,” said Owen L. Cyrulnik, counsel at Grais & Ellsworth in New York, which is representing investors in the suit against Countrywide.
The lawsuit was filed in December after Bank of America struck a predatory lending settlement with attorneys general in 11 states. In that deal, the bank agreed to modify thousands of mortgages written by Countrywide, providing $8.4 billion in loan aid to an estimated 400,000 Countrywide borrowers.
Under the terms of the settlement, Countrywide said it would cut principal balances on some loans and reduce interest rates on others. Rates could decline to 2.5 percent, depending upon a borrower’s ability to pay, and remain at that level for five years.
But it turned out that Bank of America owned only a small portion of the mortgages it had agreed to modify. Investors who owned the largest share of the loans had not agreed to the settlement and would bear the brunt of the reduced payments.
Two investment funds holding Countrywide mortgages sued Bank of America, contending that the regulatory deal ran afoul of promises Countrywide had made when it issued the mortgage securities.
The funds, Greenwich Financial Services Distressed Mortgage Fund and QED L.L.C., are owned by Mr. Frey, who contended that the mortgage securities contained pledges by Countrywide to repurchase from investors any loans it agreed to modify. On later mortgage securities, Countrywide changed the agreements, eliminating the language about buying back modified loans.
According to the lawsuit, which is asking for a declaration from the court to make Countrywide live up to its contracts, some 374 mortgage pools issued by Countrywide contain language pledging to buy back modified loans from investors.
The case highlights the potential for conflicts of interest in the loan servicing business. Loan servicers have a duty to investors not to do anything that jeopardizes the income stream to holders of the securities.
But servicers are often units of large banks that also make home loans. Investors in mortgage securities are increasingly concerned that the companies may put their own interests ahead of those of their servicing customers when they modify loans.
As the mortgage crisis has deepened, servicers have also come under immense pressure from the government to modify loans. The goal is to keep borrowers in their homes and curb the flood of foreclosures, but changes to loan terms can put servicers at odds with the investors they have a duty to serve.
Countrywide Loses Ruling in Loan Suit
By GRETCHEN MORGENSON
A federal judge in Manhattan has rejected an argument by Countrywide Financial seeking certain protections from investor lawsuits under new legislation intended to encourage modifications of home loans.
Countrywide, the big mortgage company, had argued that the legislation automatically voided its pledges to buy back loans from investors if those loans were modified for troubled borrowers.
The ruling is a win for holders of mortgage-backed securities who sued Countrywide in December after the company, now a unit of Bank of America, agreed to modify thousands of loans in a settlement with state attorneys general. The opinion, by Judge Richard J. Holwell of Federal District Court in New York, was made public on Tuesday.
The case against Countrywide is being closely watched by pension funds, insurance companies and other investors in mortgage securities who contend that loan servicing companies that agree to change the terms of mortgages are breaching contractual obligations to owners of those loans.
Investors who own mortgage securities receive interest and principal payments from borrowers over the life of the loans. When servicing companies modify those loans, investor payments are typically reduced.
“I view this as an opening salvo and a demonstration that investors do have contractual rights, even when it is politically unpopular,” said William A. Frey, one of the investors who brought the lawsuit. “This is ultimately going to be one of many legal battles over who should pay the hundreds of billions of dollars in losses on mortgages.”
Bank of America, which took over servicing of the investors’ loans when it bought Countrywide in 2008, is defending the case. It argued that the matter belonged in federal court and that any contractual obligations to repurchase modified loans were trumped by the Helping Families Save Their Homes Act of 2009. Under that law, servicing companies that agree to modify loans receive some protection from liability arising from the loan changes.
Judge Holwell ruled that the immunity granted under the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage securities contracts. The investors must prove that Countrywide’s pooling and servicing agreement covering their loans does indeed require it to repurchase mortgages the bank modifies, the judge said, ruling that the case belongs in state court.
Shirley Norton, a spokeswoman for Bank of America, said it was reviewing the order and considering its options. “The court did not rule that the safe harbor is inapplicable,” Ms. Norton said, merely that it did not fall under federal jurisdiction.
Investors’ lawyers hailed the decision.
“This is a first step in a decision by a federal judge that says even after the servicers’ safe harbor was enacted and even after all the wrangling in Congress, we are still going to allow people to enforce their contract rights when it is appropriate,” said Owen L. Cyrulnik, counsel at Grais & Ellsworth in New York, which is representing investors in the suit against Countrywide.
The lawsuit was filed in December after Bank of America struck a predatory lending settlement with attorneys general in 11 states. In that deal, the bank agreed to modify thousands of mortgages written by Countrywide, providing $8.4 billion in loan aid to an estimated 400,000 Countrywide borrowers.
Under the terms of the settlement, Countrywide said it would cut principal balances on some loans and reduce interest rates on others. Rates could decline to 2.5 percent, depending upon a borrower’s ability to pay, and remain at that level for five years.
But it turned out that Bank of America owned only a small portion of the mortgages it had agreed to modify. Investors who owned the largest share of the loans had not agreed to the settlement and would bear the brunt of the reduced payments.
Two investment funds holding Countrywide mortgages sued Bank of America, contending that the regulatory deal ran afoul of promises Countrywide had made when it issued the mortgage securities.
The funds, Greenwich Financial Services Distressed Mortgage Fund and QED L.L.C., are owned by Mr. Frey, who contended that the mortgage securities contained pledges by Countrywide to repurchase from investors any loans it agreed to modify. On later mortgage securities, Countrywide changed the agreements, eliminating the language about buying back modified loans.
According to the lawsuit, which is asking for a declaration from the court to make Countrywide live up to its contracts, some 374 mortgage pools issued by Countrywide contain language pledging to buy back modified loans from investors.
The case highlights the potential for conflicts of interest in the loan servicing business. Loan servicers have a duty to investors not to do anything that jeopardizes the income stream to holders of the securities.
But servicers are often units of large banks that also make home loans. Investors in mortgage securities are increasingly concerned that the companies may put their own interests ahead of those of their servicing customers when they modify loans.
As the mortgage crisis has deepened, servicers have also come under immense pressure from the government to modify loans. The goal is to keep borrowers in their homes and curb the flood of foreclosures, but changes to loan terms can put servicers at odds with the investors they have a duty to serve.
All I can say is WOW! Although I understand the investors position, we are in the middle of a serious crisis!!! This "win" just sealed the fate for more homeowners to go into foreclosure. Where is this going to end???? 
AzGryffindor
LoanSafe Member
Judge: Bank Must Explain Loan Policies - Money News Story - KPHO Phoenix
Judge: Bank Must Explain Loan Policies
Judge Orders Wells Fargo Executive To Testify In Court
Peter Busch
Reporter, KPHO.com
POSTED: 10:50 pm MST August 19, 2009
UPDATED: 7:16 am MST August 20, 2009
PHOENIX -- A federal bankruptcy judge has ordered a top Wells Fargo executive to testify in court about the bank's loan modification policies.The order came in response to a Phoenix woman's complaint that Wells Fargo had ignored her modification request."I sent them everything they asked for, and then when I called to follow up they said, 'What paperwork? What modification? We don't know what you're talking about,'" said Bobbi Giguere. Giguere said she applied for a modification after she lost her job in December.
"I've got a 15-year-old boy that's depending on me to raise him, and he wants to stay here," she said.Instead, she said she received a notice of foreclosure while she thought she was still trying to work out a deal with Wells Fargo. Now Judge Randolph Haines wants a senior officer at Wells Fargo to defend the charges. Bankruptcy attorney Randy Nussbaum said it is very unusual for a judge to issue such an order."The judge is trying to send a message to Wells Fargo and other banks that they need to pay better attention to customers who want to modify their home loans," said Nussbaum. Wells Fargo responded by issuing a statement from Mary Coffin, the bank's head of home mortgage servicing."We appreciate the court giving us the opportunity to share our servicing practices, which include working with all customers facing hardships -- even if they declare bankruptcy -- until every reasonable option to prevent foreclosure has been exhausted," read the statement.
In a phone interview, Coffin said Giguere's case is very complex because her circumstances changed after she initially applied for the loan modification. However, she said the bank could have offered better customer service. "We definitely could have communicated better," said Coffin. The Wells Fargo executive was scheduled to appear in court this Thursday, but the judge gave them an additional two weeks to prepare their case.<!--stopindex-->
Judge: Bank Must Explain Loan Policies
Judge Orders Wells Fargo Executive To Testify In Court
Peter Busch
Reporter, KPHO.com
POSTED: 10:50 pm MST August 19, 2009
UPDATED: 7:16 am MST August 20, 2009
PHOENIX -- A federal bankruptcy judge has ordered a top Wells Fargo executive to testify in court about the bank's loan modification policies.The order came in response to a Phoenix woman's complaint that Wells Fargo had ignored her modification request."I sent them everything they asked for, and then when I called to follow up they said, 'What paperwork? What modification? We don't know what you're talking about,'" said Bobbi Giguere. Giguere said she applied for a modification after she lost her job in December.
"I've got a 15-year-old boy that's depending on me to raise him, and he wants to stay here," she said.Instead, she said she received a notice of foreclosure while she thought she was still trying to work out a deal with Wells Fargo. Now Judge Randolph Haines wants a senior officer at Wells Fargo to defend the charges. Bankruptcy attorney Randy Nussbaum said it is very unusual for a judge to issue such an order."The judge is trying to send a message to Wells Fargo and other banks that they need to pay better attention to customers who want to modify their home loans," said Nussbaum. Wells Fargo responded by issuing a statement from Mary Coffin, the bank's head of home mortgage servicing."We appreciate the court giving us the opportunity to share our servicing practices, which include working with all customers facing hardships -- even if they declare bankruptcy -- until every reasonable option to prevent foreclosure has been exhausted," read the statement.
In a phone interview, Coffin said Giguere's case is very complex because her circumstances changed after she initially applied for the loan modification. However, she said the bank could have offered better customer service. "We definitely could have communicated better," said Coffin. The Wells Fargo executive was scheduled to appear in court this Thursday, but the judge gave them an additional two weeks to prepare their case.<!--stopindex-->
ugh_2009
LoanSafe Member
Regarding modification and unemployment; Found this link on the hopenow website -
Lost jobs spurring foreclosures | Wichita Business - Kansas Business | Wichita Eagle
Lost jobs spurring foreclosures | Wichita Business - Kansas Business | Wichita Eagle