2009-12-07 — cnbc.com
Mr. Schakett told me that of the 65 thousand trial modifications set to expire Dec. 31st with B of A, a full two thirds of the borrowers, while current on their payments, have not submitted the full documentation required to turn a trial mod permanent under the HAMP guidelines.
"We don't really know the major reason why the customers are not returning the documentation," Schakett claims. Well I can tell you why (and I'm sure he knows this too). The trial modification process only requires oral verification of income to begin, but to go permanent, you need to prove your income, submit your tax returns, and basically come clean with all your finances. I'm guessing a lot of folks who took out their initial loans with false or non-existent documentation, aren't eager to let the government know that.
Uh, or maybe BofA is conviently "misplacing" the documentation for people who attempt to enroll. That is what WE are hearing.
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Comments:
suzzyj at 20:59 2009-12-08 said:
Good Post on The Oral Verification-I was wondering how some of my former refinance loans (only did conforming) were qualifying for a loan modification when employment had not changed and their DITI I remember being approximately in the range of 24-30. 1. One former client had escrows waived, then despite notices and even having his real estate tax default published in his local paper did not ay taxes. Basically 22 months later BAC caught up. So PITI needed to e adjusted to double up on taxes that were originally $400 a month. Told former client that was a very fair deal, he was not paying any additional new interest, just catcing up with the $400. But now the $800 in taxes monthly, put him over the 31% DITI, so loan modification is reducing his PITI by $450, when if he had paid real estates taxes on time he wold not qualify for the loan modification. Plus it is just 22 months of doubling up, but he says he gets the $450 reuctionfor years--this is not right. Also, told by former clients that if loan closed with just the husband on note, then wife despite living there for over 20 years, her income is not counted. With both they are a 22% DITI, with husband alone they are 35%. But these are couples married for years, both living in the house. Just because the wife had poor credit, and was not on the loan should not automatically qualify for a loan modification using the husband's income only. Plus, I have heard of some homeowners quoting their net income to banks not their gross. Pointed out to one that they were qualified on gross, and Home Affordable is based on gross. They used net. So I agree, that are homeowners that are not returning their loan modification paperwork for a reason. But no way should a homeowner who directs his real estate taxes for 22 months to his built in swimming pool that his kids wanted, receive a loan modification just because the need to double up on taxes in his PITI puts hom over the 31%, when with regular PITI he is under 30 percent. I believe in loan moifications, but just alone the two scenarios should not qualify. Permalinkadd a comment | go to forum thread
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