Bank of America Mortgage Modification
Servicer B of A
Investor: Freddie Mac
Situation:
Homeowner unemployed 12/10-10/11
Took job less than 1/2 of previous pay. May 2012 took present job at 18 per hr.
Modification granted 9/12 with deferral $39,000 bal 85,000, 480 mo at $414 per month. Paperwork signed and sent with payment per instruction letter. All payments under mod made timely. May 2013 received foreclosure notice and pay. Payments under modification were returned. (B of A charged $25 ea to send them back).
Reason: Modification papers not notarized by homeowner.
Told homeowner to reapply and was denied because he made too much income. (during the first part of the year, 2013, he had a lot of overtime - 20 - 30 hr per week. Plant started a third shift and letter from employer included that overtime would be reduced or eliminated. B of A says they annualize YTD earnings including overtime! (what??)
Homeowner pointed out 1) there were no instructions saying to have notarized; and at the time did not understand that was what the bottom of page was for. (I have copy of B 0f A letter and they clearly have no indication homeowners signatures were to be notarized. 2) B of A did not notify the homeowner the documents were incomplete, buy simply waited to initiate foreclosure.
Homeowner was injured on the job two weeks ago with multiple injuries and just got home from the hospital. Company has put him on light duty working from home to continue his pay under workers comp. B of A says he will have to wait and produce checks that his income is reduced.Really??
Home owner has complaints file with Attorney General and CFPB. B of A responded to them by assigning case back to the same individual that is no help.
Questions:
1) Did B of A have a requirement to notify homeowner of missing notary and a time frame in which to do so?
2) Don't the guidelines for modification state Servicer MAY include overtime?
3) Doesn't the employer letter call for a judgement that overtime may not be included in earnings for the entire year at the same rate for the entire year?
Thanks. Looking for any feedback to save this home owers home.
Replies to This Discussion
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Permalink Reply by Kevin - Greenville, SC on
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Review the Freddie Mac Servicing Guide.
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Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on
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Kevin, After spending the evening reading Sect 64, 65, A B C D65 etc. of the Freddie Mac Servicing Guidelines, the only thing I could find is B65.18 where it says "If the borrower makes all Trial Period payments timely, the servicer must modify the Mortgage, ... I could not find anything about the Borrower signing the permanent mod papers, sending them to the bank, which they acknowledge they received, and the Borrower did not notarize them and B of A accepted payment under the permanent plan Nov, Dec, Jan 2012. Returned the payments at the same time that the loan was referred for foreclosure. Seems to me that the lack of the notary is curable.
Also could not find anything about requiring the Borrower to start over in this case. B of A reasoning is the lack of the Notary as the Borrower declining the permanent modification.
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Did you contact Freddie Mac and the FHFA as well?
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check into this - http://www.freddiemac.com/singlefamily/service/docs/streamlined_mod...
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Kevin, I read that, but with the new job the pay is such that item 7 Answer is not met. ie
7 Q - What are some of the key eligibility requirements of the stream lined modification?
A - The modified principal and interest payment is less than equal to the pre-modification principal and interest payment.
Which it is not--
So his income is such that he does not qualify with the new job and not enough time to make up the delinquent amount from the long un/under employment.
Been there already. So the only thing I can suggest is talk to an attorney about a Chapter 13 workout ,which is a shame as his other debts are minimal.
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Permalink Reply by cat on
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Did you escalate to seller's congress person??? This usually helps a LOT and is pretty easy. Also, my solution to BofA problems is to not work with BofA - check out this article:
http://www.salon.com/2013/06/18/bank_of_america_whistleblowers_bomb...
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Permalink Reply by Reuben Dunn on
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Hello, I worked for the BoA, working modifications in both the Home Retention and then in the office of the President, working escalated cases, for four years.
If the modification went to a permanent status, and permanent documents were sent to the homeowner, he/she would have been sent the documents with a return deadline, usually 14 days from the date of the letter, and instructions on where and how to return it.
This is not a single letter by the way. Permanent documents contain a cover letter, and six pages, which contains two copies of of the modification agreement.
Included with the permanent documents is an affidavit page that is to be signed dated, and notarized. For California residents, there is a State specific affidavit.
Income verification is based on gross pay, using pay slips for a full 30 days continuous income.
Overtime is generally not included as, for the most part it is not guaranteed.
If the homeowner is off work and is on reduced income, then proof will be required. If the income reduction is permanent, then proof will need to be provided.
The process of foreclosure is not one that is fast tracked. If there was a sale date in the works, it would have been postponed, during the trial modification stage, and, if the modification defaulted, the process would start again. -
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Reuben, a permanent mod was sent (I have a copy), was signed according to the instruction letter, timely returned and payments made for four months on time, then B of A stopped accepting payments and sent foreclosure notice. The instructions said for the homeowner to sign and return (I have a copy of the instruction letter), while there was a notary page the homeowner had no idea he was to have it notarized and the fact was omitted from the instruction letter. Hence B of A is saying after making four timely permanent mod payments that the permanent mod was declined by the homeowner. It was B of A who stopped accepting payments.
B of A said they had to reapply for a mod (rediculous), but they did and were denied because he made too much money in his new job he had since Jan 2013 and yes they counted the OT as income - all 30 hours per week and would not budge on that, even when the plant gave a letter that a third shift was started and OT would be greatly reduced. Still B o A would not budge. Appealed to Presidents office and same result. The statement was "we only look at YTD earnings". Hog wash!!
Filed appeal on mod decline. Homeowner received a new sale date of Oct 2. UPDATE!!! Yesterday got a call and said B of A appeals -- "B of A made an error in declining the permanent mod" Homeowner will receive a new permanent mod package dating back to the Nov 2012 date of the original permanent mod and payments will have to be made up. Fortunately homeowner had put funds asside!!! Also asked post Jan 2013 fees, late charges, foreclosure attorney fees be removed from the amounts owed. Appeals said we would have to deal with that seperately!! (what?? they made the mistake and now the homeowner is going to have to fight that battle too!!) We'll see -----
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Were you able to get the sales date postponed?
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Update! Appealed to B of A and Freddie. Got a call Sept 10 from B of A saying "we made a mistake". Freddie also called to make sure B of A followed up. New permanent mod papers sent, foreclosure 10/2 postponed with no new date. Homeowner received papers and took to B of A service center to make sure all was properly signed! They even rolled the payments that were refused on to the end of the loan; foreclosure fees removed. Still costing the Homeowner more in the long run, but another home saved! Very happy homeowner.
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