Quick Answer: A Bank of America loan modification can consolidate multiple mortgages and potentially reduce payments, but the process often takes over a year with unclear terms. Given the homeowner pays $1,500 monthly on a $147,000 loan versus a potential $900 payment elsewhere, consulting the available legal coverage could help expedite the stalled modification process.
When we bought our home 8 years ago, we got an 80/20 loan from Countrywide for interest rates in the 8% range. We have been working with B of A, or trying to, for almost a year now to mocify our loan as they said we didn’t qualify for any of the government programs. They say they are going to modify our loan (at least consolidate to one mortgage) but have yet to tell us what the new rate is.
I recently obtained “legal” coverage through my job. As long as I use their bank of lawyers I don’t pay anything except my deduction of $7 from my paycheck. Would you advise I contact one of the lawyers to help us move this along? We are paying over $1500 a month on a $147,000 loan. An independent finance company said our payment could be as low as $900 a month. B of A just gives us the runaround every time we call.
Thank you so much!!
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In our experience it is next to impossible to get any cooperation from Bank of America when trying to get a loan modification. Ours was denied (they said we didn’t qualify) and when calling to find out why we talked to three separate people who all gave us a different answer.
Julie,
It sure does sound like you’re paying a lot to borrow $147k, even with taxes and insurance included. A better interest rate would certainly go a long way and both loan modification or refinance could help you get that done.
One of the first questions that comes to mind is…have you fallen behind on payments or do you remain current?
There is a big difference. If you have never missed a payment, then no matter what you do, say, or send them you will NOT get a loan modification.The only way to modify would be to fall behind, as crazy as that sounds, that’s the reality.
As for combining both the 1st and 2nd mortgage together… that doesn’t sound like a loan modification that they’re talking about. I have never seen or heard of a lender consolidating two loans into one while simply doing a modification. They may have been talking about an in-house refinance option, or maybe the government HARP program. If you have not fallen behind yet, they may be worth looking into further. In fact, you should also look outside of BOA and speak with other local mortgage professionals to find out what you would need to do in order to refinance.
If you have already missed payments or have severe negative equity in the property, then your retention options will be limited to loan modification. It may help you to have an attorney review your modification paperwork before it is sent in again, especially if it’s not going to cost you anything.
Keep in mind though, the only way to receive a modification is to qualify for one, and that is based almost entirely on your current financial standing, ie… income and expenses. If you show that you make too much money, you wont qualify… or if you show that you don’t make enough, you won’t qualify. It really is black or white like that, either you qualify or you don’t. The only way to change the outcome is to adjust either your income or expenses to fall within the set guidelines.
Good Luck!
Andy