mortgage modification with my bank
- Thread starter mm3m88
- Start date
JimVonBaden
Well-known member
Sounds fishy. How much are they adding to the principal? Banks rarely offer to lower the interest rate on their own, especially on a house that is upside down.
Jim
Jim
danieldd
Well-known member
I just did something similar, but it was with the bank that I had my original mortgage with. I was at 4.875% on a 15 year note. Unbelievably, they offered me 3.5% fixed for 7 years - no closing costs.
I took it.
I can now pay the house off in 3.5 years, allowing for doubling up on my principal.
What doesn't compute is them wanting you to sign a bunch of papers without adequately reviewing them. You must be able to review them - as it is to your disadvantage if you don't.
The reason my bank made me this offer was, according to them, I was a good customer and they didn't want me going elsewhere. So, even though they're not making as much off of me now, they've still got me as a loyal customer. Works for me. Also, this new type of loan I got allows me to pay my own taxes and insurance, instead of the bank. I'm good with that. I never liked the bank paying my taxes and insurance out of an escrow account that I payed into.
I took it.
I can now pay the house off in 3.5 years, allowing for doubling up on my principal.
What doesn't compute is them wanting you to sign a bunch of papers without adequately reviewing them. You must be able to review them - as it is to your disadvantage if you don't.
The reason my bank made me this offer was, according to them, I was a good customer and they didn't want me going elsewhere. So, even though they're not making as much off of me now, they've still got me as a loyal customer. Works for me. Also, this new type of loan I got allows me to pay my own taxes and insurance, instead of the bank. I'm good with that. I never liked the bank paying my taxes and insurance out of an escrow account that I payed into.
Something banks never talk about is overpaying on your current loan.
There are no extra fees if you add an additional $100 or $10,000, or whatever, to your monthly payment and note that the extra money is to be applied to the principal.
The computer will re-calculate you loan every month, based on the lower principle.
There are no extra fees if you add an additional $100 or $10,000, or whatever, to your monthly payment and note that the extra money is to be applied to the principal.
The computer will re-calculate you loan every month, based on the lower principle.
Delta74
Well-known member
as said above, they dont tell you about over paying, and try not to talk about Bi-weekly or weekly payments, want to save some money, pay them weekly, bet you save close to 30% of what your paying now.
ZRX61
Well-known member
My former mortgage company did that.... only they held on to the payments until the end of the month before banking them.... & if you over paid, they held that amount until the end of the FOLLOWING month...so there wasn't any savings...
Weekly wont do anything, they recalculate interest monthly. Biweekly nets you 13 mortgage payments in a calendar year instead if twelve. That's where the savings come from.
I heard there was something in the law about defaulting on the original loan versus defaulting on the refi loan. I think it was something like if you walked away from the original loan all they could go after you for was the house. But walking away from a re-fi opens up your personal assets for them to get their money. Not sure if I got that correct or if its tat way in all the states, maybe someone here can comment. Either way I would get some legal advice before signing up.
A couple thoughts:
I would only meet with them at the bank or title company. This reduces the chance of fraud.
Make sure you retain title insurance for yourself, not just bank.
If your not 100% comfortable, spend a few hundred to hire a real estate attorney to attend the closing.
If you go through, make sure you refile for mortgage deduction.
I would only meet with them at the bank or title company. This reduces the chance of fraud.
Make sure you retain title insurance for yourself, not just bank.
If your not 100% comfortable, spend a few hundred to hire a real estate attorney to attend the closing.
If you go through, make sure you refile for mortgage deduction.
incorrect on the first assumption about original loan.
MoparTrucks
Well-known member
What they are offering sounds legit and is something that is being forced on them as part of a civil judgement with the DOJ and it could end up being a good deal for you so I wouldnt just dismiss it; but I also wouldnt just sign what they put in front of you. Bank of America has a deserved bad reputation but the terms they are offering are pretty good.
Here is a link on the settlement from last year.
http://www.justice.gov/opa/pr/2012/February/12-ag-186.html
Here is a link on the settlement from last year.
http://www.justice.gov/opa/pr/2012/February/12-ag-186.html
Requin6
Well-known member
Just did this late last year. My mortgage is also with Bank of America. It is a part of the DOJ settlement, mobile notary came to the house and it took like 5 minutes to seal the deal. Its legit. Enjoy your monthly savings. No added principal or catches.
Falcon67
Well-known member
If you can refi the remaining note for better than 1% lower interest at no cost, you best get after it. Guy at work has a similar offer from Chase - 3.5%, no cost. We're with BoA @ 4%, so not likely to hear anything from them on this item.
Correct, but yes, it depends on the state you're in and the type of property bought. In CA, for example, the first loan made to buy a primary residence is a purchase money mortgage, and is non-recourse by state law. The lender can only go after the property in the event of a default. They also have to give you any proceeds if they were to foreclose and then auction the home off for more than what is owed. The laws were designed to protect against predatory lending. However, a refi is usually considered a recourse loan. The lender may foreclose on the property and pursue judgement for any further debt owed. However, this has been fairly rare. In addition, any debt forgiveness has historically been treated as income with a 1099 form issued. This has been removed by the mortgage debt forgiveness relief act of 2007, and extended in the latest round of fiscal cliff negotiations.
What you need to find out is if this is a refinance or a modification. They are two different things. Did they talk about a HARP refinance? If you do a loan modification that may impact your credit and will have an impact on being able to potentially refinance again, since almost all lenders will not refinance an existing modification. Although chances are with rates this low, you probably will not refinance again. Where are you located?
darkk
Well-known member
We orig, had a 30 yr @ 6 3/8 % paid on it for 3 yrs. Bank sent an offer to refi at lower rate with no added fees or points. We took offer and got 3 1/8 % for 15 years. Mortgage went up slightly but saved a ton for the total payout and dropped 12 yrs worth of payments. The federal Govt. is behind the whole deal with the banks and prime interest rates. This is to help home owners keep their homes during falling home values and poor economy. Otherwise the mortgage defaults would probably destroy the housing market and some banks. Economy wouldn't do very well either.
Oh quiet! He had a question and maybe gave a little more info than he needed, but that's his business isn't it? I find better info from the internet that I get from professionals (including those that are family members). It's always worthwhile to get information from multiple sources just to make sure you're on the right track, esp with something like this.
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I'd get some mileage out of the original parties involved in 2006 purchase of house in the first place. House that was bought for $320K had a 6% commission that went to Realtor, AND original purchase had to have title insurance so there's 2 places to walk-in and get "free" advise that you've actually already paid for. Surely these 2 businesses are going through LOTS of same issues with other customers that you have with BofA.
DOJ is forcing proper action by BofA so take advantage of lower interest rate.
Good luck and let us know how this turns out for you.
DOJ is forcing proper action by BofA so take advantage of lower interest rate.
Good luck and let us know how this turns out for you.
theoldwizard1
Well-known member
First, I would NEVER deal with BofA, or any of those other thieving large banks !
Join a Credit Union that does mortgages and check there.
Join a Credit Union that does mortgages and check there.
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Falcon67
Well-known member
Credit Unions here can't match BoA, Chase, etc rates. Not enough assets. Lately CRs haven't even been competitive on car loans. We haven't had any issues with BoA, after the loan was written. They were pretty hap-hazard getting the loan done (VA Repo sale program) but once we worked through that, no problems. They are all "thieving large banks" so just get the best deal and keep track of all the paperwork. Having your shi...paperwork in order is the best defense against corporate goofiness.
^ ^ ^ This . . . . . and the part about getting proper paperwork is critical.
Demand that Title Company/Bank involved provide you with full-size legal copies all ALL documents WITH all signatures. My title company even provided electronic PDF's as a service when they scanned in originals to their electronic paper document system. That way, I've got both paper "originals with signatures" along with PDF as backup (done on their nickel and time).
PhantomEB
Well-known member
Major savings by goin weekly payments! Thats what I do.
How do they come up with the amount for the weekly payment? Do they take the calculated monthly and divide by 4? If so, then that equates to 13 monthly payments in a year (rather than the standard 12 most pay). That extra payment is what saves you money.
Blue XJ
Well-known member
Do you know the actual details? I had the same offer made, but it was under the HARP program, it allows people that are underwater on their mortgage to do a no cost re-fi and get a lower rate. You can either stretch your remaining balance out to 30 years and really lower your payment, or leave the term length the same and jsut reduce the interest rate.
It's legit if thats what they are actually talking about. I personally know about 2 dozen people that have done it, including myself.
http://harpprogram.org/
It's legit if thats what they are actually talking about. I personally know about 2 dozen people that have done it, including myself.
http://harpprogram.org/
Would be worth checking into whether they would actually allow a Bi-Monthly payment plan where payments would be due approximately every 2 weeks. This would quickly eat down principal balance . . . IF . . . . mortgage servicing company actually applied payment at time of payment.
Worst case scenario, take the longer 30 year mortgage (or years remaining) and just pay extra principal each month . . . . AGAIN after verifying that mortgage servicing company applied that extra payment amount as all principal.
Worst case scenario, take the longer 30 year mortgage (or years remaining) and just pay extra principal each month . . . . AGAIN after verifying that mortgage servicing company applied that extra payment amount as all principal.
I have just over half equity, not under water, and very high credit scores. I met a traveling title agent last month to sign Chase refi from 6% down to 3.25%. We met in lobby of my Chase bank and they sat us in an office. It only took a few minutes and was told this wasn't as much about HARP but Fanny Mae incentives to banks!?#
Apparently, the banks only get paid "Servicing Fees" for managing the loans, and they are often actually with Fannie Mae although that name never came up in previous loan or this one. The independent notary driving around closing these loans for numerous banks explained it just a bit as we were leaving the bank lobby. Maybe Fannie is under pressure to reduce rates, or getting credited for it - I don't care. Not going down political rabbit holes here.
No fees. Just savings that I'll apply to extra principal in future payments for earlier payoff. Chase reached out to me and is approaching other customers. A friend in the office with me called Chase to see if he could do same thing since his son just did this also. They said sure, and they are setting him up at 3.25 with no fees.
Apparently, the banks only get paid "Servicing Fees" for managing the loans, and they are often actually with Fannie Mae although that name never came up in previous loan or this one. The independent notary driving around closing these loans for numerous banks explained it just a bit as we were leaving the bank lobby. Maybe Fannie is under pressure to reduce rates, or getting credited for it - I don't care. Not going down political rabbit holes here.
No fees. Just savings that I'll apply to extra principal in future payments for earlier payoff. Chase reached out to me and is approaching other customers. A friend in the office with me called Chase to see if he could do same thing since his son just did this also. They said sure, and they are setting him up at 3.25 with no fees.
Fubeca
Member
Watch out for the bi-weekly 'plans' you see. Most are revenue centers and charge a fee. The actual decrease in interest due to paying bi-weekly is not significant compared to the benefit of paying the the equivalent of 13 monthly payments vs. 12.
Simply adding additional principle reduction payments each month accomplishes the same goal - without any fees.
As stated above - make sure your bank/processor actually accepts and processes the additional payments. Some banks require two checks.
If my bank was offering a good refi - I'd probably take it if I was planning to stay in the house.
Simply adding additional principle reduction payments each month accomplishes the same goal - without any fees.
As stated above - make sure your bank/processor actually accepts and processes the additional payments. Some banks require two checks.
If my bank was offering a good refi - I'd probably take it if I was planning to stay in the house.