Bank of America Hog-Ties Homeowner Looking for Loan Modification Virtually Guaranteeing Borrower Will Lose the Home in Foreclosure - Another example of "I would love to give you a loan modification Mr. Smith. Just bring in a unicorn to our office and we will be happy to accommodate you!"

Just in this morning. . . . Client calls me crying on the phone.  Her husband suffered a small heart attack when he received the proposed loan modification from Bank of America.  He just so happened to have received the same loan modification paperwork that I received.  The poor women faxed me her loan modification which I reviewed.  Her is what I discovered.

First of all the amount they put for the monthly mortgage payment is just as high as the regular payment.  They are virtually giving no assistance to this borrower.  It is an FHA loan.  While they are submitting a claim on one hand to FHA under the mortgage insurance, they are at the same time rolling the same amount of the claim back into the loan!

The payment for which BofA is asking does not reflect the new lowered interest rate.  It continues to reflect the old rate.

The loan modification notice is dated April 21, 2010, but is not sent out federal express until April 23, 2010 and gives the borrower until Tuesday April 22, 2010.  Funny how Bank of America seems to only send out loan modification notices on Thursdays and want them back by a Tuesday.  Could this be because they don't expect a borrower to find a lawyer over the weekend to help them review the files.  Or worse yet, they don't expect the borrower to be able to find a NOTARY who can NOTARIZE the documents so they can be sent back in time?

Or did they pick that timing - DUE DATE, knowing that theses Borrowers get paid on the 15th & 30th of the month and would not have collected a paycheck in time to pay the $1750.00 they want in order to receive the loan modification?

By the way they set a Sale Date for foreclosure of May 7, 2010.

Now Bank of America's loan modification paperwork states that this loan modification is completely invalidated if the borrower should file a bankruptcy during the 28 years they have left on the loan.  So this means that along with paying the mortgage which didn't change at all. .. . the borrowers are going to have to pay back the 40K they accumulated in credit card debt to take cash advances to to survive when the wife lost her job and they couldn't afford the payments in the first place.  So here is the hog-tie.  Bank of America makes these borrower choose between keeping the house and keeping the credit card debt

The next rub in all of this is the language on the "Negotiation Agreement"  It states that the borrower must return all of the requested documentation for final approval.  If the final approval is not given they can go forward with foreclosure sale on May 7, which is only one week after they receive the documentation on April 28, 2010.  Do you get the same feeling I get?  Bank of America is going to collect another $1,750 from these borrowers, deny the loan modification on May 6, 2010, sell the house on May 7, 2010.  So these borrowers end up paying for their own execution!

Bank of America goes one step further.  They say that unless the borrowers receive something in writing from Bank of America stopping the sale . . . (which is the functional equivalent of calling your local Bank of America Branch office and ordering pizza from them to be delivered - - you know THAT's never gonna happen) the sale will go forward.  And as I said before if they file a chapter 13 to stop the sale they won't get a chance at loan modification at all!

Then to make matters worse yet, this is an FHA LOAN.  The offer does not comport at all with the federal GUIDELINES FOR FHA LOAN MODIFICATION!!!!!!  But again, I believe those guidelines state that if the borrower files for bankruptcy they are disqualified as well!

Okay we will call Bank of America on Monday Morning to see if they can explain themselves for this deplorable loan modification offer.  An offer that provides absolutely no assistance and see if we can change this situation.

I'll post again and let you know what happens.

ADVICE:  If you are facing a foreclosure sale, take the credit counseling course that is required to be taken for pre-bankruptcy filing.  You can find an approved one at CRICKETDEBT.COM  they charge like 36 bucks for the course.  Then hire a bankruptcy attorney to prepare your paperwork who has the ability to electronically file. This way you can negotiate with the bank, if you can ever get a hold of anyone.  If they tell you the sale is going to be continued, tell them you need an e-mail confirming that fact.  Then if they don't give you written confirmation that sale is being continued, the night before, ask your bankruptcy attorney to file your emergency petition.