Saturday morning I saw that Elena's paycheck had been deposited to her bank account. I knew that it was time to call Bank of America and set up the process to have her bank account debited each month for the three month trial period. I dare not send an electronic payment or checks. Some dumb clerk would lose them and you would be disqualified for not making payments. When I got called a charming young lady named Ashley came to the phone. She took down all of the information and was most helpful. We are now set up to make the three trial payments in December, January, and February. She asked me to verbally give her our income and expense statement for each month. I said that I would do that later. I thought it better to fax and mail this information to Bank of America Home Retention Team in Plano, Texas. I got a schedule together with monthly income and expenses. I also did a schedule showing extra resources in the event the loan went bad again. Before I could fax and mail this information, I got a call from Bank of America Home Loan Counseling. The lady on the phone was tougher than Ashley. She told me that I had to give her all the income and expense information. I did this and confirmed her results. She was happy with what she heard. She told me to call every two weeks and see how things were going. She warned me to be especially concerned about a Federal Express package that should arrive by the first week in February asking for hard documentation on income, etc. I thanked this lady and hung up. I still faxed and mailed the information to Plano just to make sure they had it and knew that we qualified.
Elena worries that these three payment offers are just a con to collect some more money before the house is foreclosed. In our case, the house is valued at $475,000 according to www.cyberhomes.com. We owe $560,000 on the house, $63,000 in back payments and $7,000 in back property taxes and homeowner's insurance. The total debt is $630,000. The actual foreclosure would cost Bank of America another $50,000; based on the national average of the price of a foreclosure. We are up to $680,000. If the bank sold the house for $475,000, they would lose over $200,000. Our $12,000 in payments would be just "a drop in the bucket."
Why do people get turned down in these loan modification programs? THe answers are a s follows:
1) The Making Home Affordable Program probably has very tough requirements on documentation to be provided and procedures to be followed. If one does not comply, they are rejected.
2) Many people have lost their jobs or had their wages cut to the point that they cannot prove that they can pay for any new loan. They will get rejected. Elena and I have solid proof of adequate income to pay for a new loan.
Having said all of this, I will be alert every day and calling every week. We also have a lawyer ready to go if we are turned down.
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