Bank of America Loan Modification Denied - What Now?

[NESG]

Many professionals consider Bank of America to be one of the most frustrating lenders to modify a loan with. With the recent acquisition of Countrywide, they now service an enormous amount of home loans for an equally large amount of backing mortgage investors. This means that every loan they have falls under different guidelines and the modification options on each loan are always different. Patience and persistence will be the your best weapons to fight this uphill battle.

If you've already been denied for loan modification it's very likely that Bank of America kept you waiting at least 30-90 days before they deliver that unfortunate news. This is the typical timeframe for the modification process with Bank of America and it's never recommended to continue missing payments while waiting on a modification request. There is no advantage or leverage gained by falling further behind on mortgage payments. If your request was just denied and you find yourself more than ninety days behind, it's important you determine where the loan stands in the foreclosure process before beginning another lengthy review process. If you don't feel comfortable discussing the foreclosure process with your lender yourself, it's advisable to have somebody you can trust call with you to determine where in the foreclosure process the loan is, and also determine if there is any immediate danger of an auction date.

The #1 most important thing if you have just been denied is timing. You don't want to start all the way at the beginning of the review process again, if you don't need to. Many times while the negotiator is still assigned you may be able to resubmit your financial statement before the review is closed. You will need to work quickly to update all the financial information you originally sent to start the review (pay stubs, bank statements, tax returns, profit & loss, etc). The original financial statement is why your loan modification was denied and you will need to quickly make the adjustments or correct any inaccurate calculations from the original. Many times a representative may explain what was wrong with your finances, giving you an idea as to what adjustments are needed. If too much time passes and the review is closed, it may mean you will need to begin the review process again and another 30-90 days before your financial statement will be reviewed again. Timing is everything with Bank of America and based on common practice it's necessary to call them twice a week while the review process is in these end stages.

The bottom line is, don't give up. You weren't denied the loan modification because they don't like you, it's only a matter of numbers. Just don't forget another important number, missed payments, always understand and be honest with yourself about how far behind you are and do your best to keep the loan from slipping into active foreclosure.

[hardikvagadiya@gmail.com]

Many professionals consider Bank of America to be one of the most frustrating lenders to modify a loan with. With the recent acquisition of Countrywide, they now service an enormous amount of home loans for an equally large amount of backing mortgage investors. This means that every loan they have falls under different guidelines and the modification options on each loan are always different. Patience and persistence will be the your best weapons to fight this uphill battle.

[DanNorth58]

Now that you have gotten far enough through the Bank of America loan modification process you are now at a point where your loan modification will move much faster.

That's right you are not done yet. Now make your counter offer and request that your Bank of America loan modification denial be reviewed by sending a Qualified Written Request back to the Loss Mitigation Officer that sent you the denial and make sure you send cc's to the CEO and/or the manager of the Loss Mitigation Department at the service center where you were your Bank of America loan modification was denied.

This is a lot simpler than it sounds, just write Qualified Written Request at the top of the paper you send and clearly state exactly what you want in one or two sentences. "Please re-evaluate my Bank of America loan modification denial. I am resending all required documents updated to today's date with a proposed loan modification of terms that are affordable for my financial hardship." You do not need to use those exact words but you want to state exactly what you are requesting and exactly what you want Bank of America to do.

Do state what monthly payment you can afford to pay including the homeowner's insurance and property taxes in that monthly payment, as you will be required to make monthly escrow payments to cover both in any modification Bank of America will do.

You should state what your escrow payment will be each month (1/12th of the annual property tax and homeowner's insurance, that is set by your taxes and the coverage you have, you should shop to lower your insurance premium), the mortgage payment you can afford, what interest rate you want, the length of the loan, that all missed payments are added to the back of the loan to bring the mortgage loan current, all fines, penalties, fees, interest etc on missed and late payments are waived, legal fees and filing fees if applicable are waived and place the loan back into good standing.

Do run your figures through the Net Present Value Test to see what is likely to be approved. You can go to my site to download the government model NPV Test spreadsheet (go to the link in my signature, once on the website use the search box to find "NVP Test" and download the spreadsheet). Here is where you can really play with all the figures to see what will work to get the payments you can afford and the loan modification that Bank of America is likely to approve.

[crates]

After doing a number of short sales and eventually befriending a few employees within Bank of America, I can tell you a couple of important items.

1. Yes they are in fact the biggest pain to deal with, no questions asked.
2. While the one individual didn't quite say it was "laziness" per se, he admitted that there is a lot less work to denying a loan mod than completing one. Sad to say, these people are extremely backed up with loan mods and short sales. Chances are they may just deny your loan mod just because they have no other way to catch up on work.
3. Make your case more compelling. There are still human beings on the other side and if you make your hardship letter all the more convincing, it will help your case.

When it comes to Bank of America specifically, don't be afraid to apply again and again even after you've been denied. It will pay off in the end.