topic Re: y Re: American Residential Law Group Loan Modification with BOA in Mortgage Loans

American Residential Law Group Loan Modification with BOA

Bethm1026 — Thu, 31 Dec 2009 18:32:26 GMT

Has anyone heard of them or used them for a loan modification?

I called them...sent them a 3rd party auth. form to talk to BOA about a modification.

They (ARLG) called me back several hours later to tell me that BOA WILL do a mod. for me.

However, they do want a retainer upfront.

Just need some input from you all.......

Thanks!

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Thu, 31 Dec 2009 20:51:58 GMT

first off, get the exact terms that they say BofA will offer you.

Call BofA. If they are tellign the truth, it will be on record in your file and BofA will be able to do it without the use of an outside party. There is nothing the outside company can do that you can not do on your own with a few calls.

Last, they are definietly not telling the whole story. There is no way BofA would have given an answer in a couple hours. They have to getinfo from you and documentation to support your income and need for a modification. Then it goes to the department that decides what to do from there (and if they are just servicing the loan it has to go to the people who actually own the loan for approval), then it comes back to you and there is a bunch of more paperwork you will have to do.

So, this company is not being upfront with you.. BofA probably told them that you do QULAIFY for a modification. That does not mean it is approved.

Re: American Residential Law Group Loan Modification with BOA

Lel — Fri, 01 Jan 2010 04:12:09 GMT

Be very, very, very careful about dealing with third parties to negotiate loan modifications. A large proportion - if not the vast majority - are preying on distressed homeowners and usually do not deliver on their promises.

There is no way that this company can guarantee a loan modification. Period.

The fact that they are requesting an upfront payment is a huge red flag.

You do not need to work with a loan modification "company" to get a modification. You can work directly with B of A. I'll try to dig up their number for you.

They are swamped with requests for modifications. You will have to be patient but persistent, and you must be organized. Get all your financial information together - salary, monthly debt obligations, monthly expenses, savings, etc. Be prepared to provide this information on a moment's notice - you never know when a phone call from an analyst may come. Don't exaggerate your hardship, because claiming too much of a budget shortfall will lead to a denial.

Re: American Residential Law Group Loan Modification with BOA

Bethm1026 — Fri, 01 Jan 2010 15:04:03 GMT

I have called BOA SEVERAL SEVERAL SEVERAL times and it takes an act of congress to talk to anyone there. I did do the paperwork for the HOPE program but each time I call they act like they've never heard of me and takes forever to even find my name. The response each time is, we are working on it. THEY sent me the paperwork December 1st and I fedex'd it back to them overnight that very next day.

I've since gotten foreclosure paperwork & now my husband HAS found a job & we can afford our payments once again. When I called to make my full payment BOA wouldn't take it.

I'm lost as to what to do now....ARLG did send me some forms to fill out. Hardship letter & a monthly cash flow sheet.

I sent them the authorization form and they said BOA would work with them.

I just want to save our house now that my hubby has a job again.

Re: American Residential Law Group Loan Modification with BOA

Lel — Fri, 01 Jan 2010 17:23:32 GMT

Yes, B of A is not easy to work with. A year ago, it was somewhat easier to work with them, but ever since they absorbed all of Countrywide's business and the new government plan, loan modifications have gotten more difficult, partly due to the sheer volume of the loan modification requests that they are trying to address.

The number for their loss mitigation is 800-846-2222, but you probably already knew that.

Are you trying to qualify for the HOPE for Homeowners program, or the more recent Making Home Affordable plan?

I checked out this law group on BBB, and it has a clean record. But nevertheless, I am very disturbed by the fact that they have practically guaranteed you a loan modification. It sounds like all you sent them was a third party authorization - no detailed financial information. How could they get an answer within a day, when it takes other people days or weeks to get an answer after having fully disclosed their financial situation? How much is their retainer?

I could be completely wrong about them, and I hope that I am.

Are you familiar with NACA? One of their services is to help troubled homeowners negotiate loan modifications. They have mixed results - some are successful, others are not - but they are a legitimate organization. And they do not charge any fees to the homeowners.

Good luck.

Re: American Residential Law Group Loan Modification with BOA

Bethm1026 — Sat, 02 Jan 2010 01:41:05 GMT

I checked them out as well. I've not saw any negative posts at all. I did the paperwork with BOA for the a program THEY sent me the paperwork.

We financed with Flagstar who sold it our loan to CountryWide who now is BOA.

I did give them verbal income details but not anything on paper in great detail. Just all incoming income.

The retainer is $1550.00...they said they called BOA & we can expect a reduction in our rate anywhere from 3.5% to 5.5%.....we are at 6.5 FHA 30 yr fixed.

He said they go straight to their people who make the decision. I've not gotten any further than the home retention/loss mitigation. BOA will not take my payments and told me to just "hold" all my payments until my paperwork for the HOPE.

The paperwork he did email to me was....hardship letter example & a spreadsheet for DETAILED cash flow. He said I need to be at 31% of income for my mortgage payment.

I will say, every question I asked, he answered but I'm at my wits end trying to deal with BOA...45 minutes to JUST get someone on the phone is ABSURD.......not to mention, they aren't very helpful at all.

NACA....I have scheduled a "meeting" with them when they are in my town.

I just know I need some help from someone before I lose my home.

My hubby was out of work for several months but now we are making MORE than we did before we got our house.

I just want to make my payments but they will not take it because they started the foreclosure process.

Re: American Residential Law Group Loan Modification with BOA

Lel — Sat, 02 Jan 2010 05:43:34 GMT

Good luck, whatever you choose. Maybe you can get some sort of money back guarantee from this firm. After all, they've promised you the modification.

It seems, though, that you don't need the modification anymore. You just need B of A to accept your back payments and take your home out of the foreclosure process, and your old payments would be affordable again. A lower interest rate, though, would make things even better.

I hope everything works out for you.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Thu, 07 Jan 2010 05:19:03 GMT

I have just spoken with this law group as well, and sent them the same authorization form. I am concerned about working with a third party, but my lender (IndyMac) has indicated that it could take 3 to 6 months for the possibility of a loan modification, and then we don't even know if that will occur. Our mortgage and regular escrow payment aren't the problem. We apparently have a shortage in our escrow. Last year IndyMac decided to pay our non-escrowed property taxes, then to escrow our taxes from that point on. As of April or so, we have been paying the regular escrow amount plus a portion of the amount they paid for us. However, this shortage seems to have grown and we're not sure why. The payment is $1000 too high for us; our mortgage is now about 45% of our net income.

Since we are desperate to have this modified, we have sought a third party. We found this law group and saw no negative information or BBB complaints. Doe anyone have any advice on dealing directly with IndyMac? Does anyone know if it's possible that this law group will be beneficial? On another blog site, one homeowner said in three months time, this law group saved them more than $800 per month, which was hopeful to me.

Any more advice would be greatly appreciated.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Thu, 07 Jan 2010 18:17:24 GMT

what percentage is your payment of gross income. That is what they go by. The current guidelines are to try to get people down to 31% but it sounds like you are not much above that. Also, the negative escrow is a short time thing. It sounds like you need to determine why it eeps getting lower if you are paying in to it and what happened to all of your money. INDY MAC does not have the power to pay your taxes and then initiate escrowed taxes unless you approved that with them, and in this case, it shoudl just have been a matter of you guys paying them oney for the taxes to them. If the taxes were not escrowed, then you should have had that money saved to pay them yourself. On top of that, you just have to pay monthly for the taxes instead of killing yourself 1-2x per year to come up with the money.

If that is the situation, and I am not missing anything, you are probably not a very string candidate for a modification. The escrow issues will not really be taken into account. Taxes have to be paid no matter what. It also sounds like you actual payment (not counting the escrow repayment) is probably pretty close to the 31% mark if not under it. Unless there is a change in situation (job loss/illness/etc), it is a long shot. First and foremost with a lona mod there must be a change in circumstance that requires the loan mod.

You best bet is probably ot request a 2-3 month forebearance on your account and during that time, instead of making mortgage payments, get the escrow account replenished and hopefully put away a payment or tow in savings. Then when the forebearance ends, your payments should be back to normal, you have a month or two put away for emergencies, and things are good. Any of these situation will probably hurt your FICO score to a degree, but would in the end help you. Good Luck.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Thu, 07 Jan 2010 22:42:50 GMT

Thanks so much for your reply, it was helpful. I do have another question you might have insight into: My lender's documents ask for all of expenses; although our mortgage payment (not including taxes) are not above 31%, our expenses are high and the bank's documents ask for a detailed list of every expense, including my student loan or other loan payments. How likely will they be to take these into consideration, even if the mortgage itself isn't above 31% of gross income?

Re: American Residential Law Group Loan Modification with BOA

Lel — Thu, 07 Jan 2010 22:53:18 GMT

MBerg wrote:
Thanks so much for your reply, it was helpful. I do have another question you might have insight into: My lender's documents ask for all of expenses; although our mortgage payment (not including taxes) are not above 31%, our expenses are high and the bank's documents ask for a detailed list of every expense, including my student loan or other loan payments. How likely will they be to take these into consideration, even if the mortgage itself isn't above 31% of gross income?

The 31% ratio - referred to as the front-end debt-to-income ratio - includes all homeownership-related expenses. This is sometimes referred to the PITIA: Principal, Interest, (property) Tax, (homeowners) Insurance, and Association fees (for condos). So if your PITIA exceeds 31% of your gross (not net) income, then your lender your lender will try to bring this ratio down, if they accept your case for consideration of modification.

Other debts, such as car loans, student loans not in deferment, personal loans, and credit card debt is factored into the back-end DTI ratio. Typically, lenders like this to be below 43% of gross income, but there's some wiggle room. However, if your overall monthly obligations, which include these debt payments as well as other expenses (food, gas, utilities, etc.), are too high, this can lead to a rejection of one's request for loan modification. This rationale is that if your expense burden is excessively high, then it may be equally likely that you will fall behind on your mortgage whether or not you get a modification. Over half of those who receive modifications are delinquent again in 6 months, according to market studies.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Thu, 07 Jan 2010 23:09:43 GMT

Thank you so much. I do have one more set of questions: I was told that if I miss one more mortgage payment (we missed one) it might help our loan mod case. That coupled with the fact that my husband was out of work from March through Oct (consulted some), and fairly high expenses -even if our actual mortgage payment isn't more than 31%. Do you know if that is the case? We would still pay the escrow so that wouldn't increase, and we were told the missed payments could realistically be on our account indefinitely, until the end of the mortgage.

And, if we did miss a second payment and then made a payment the next month, would we likely be granted a forbearance if we asked for it? Or would the 2 missed payments hurt that as well?

We don't WANT to miss payments, but we want to put ourselves in a position to either get a loan mod if possible - if the 2 missed payments, high expenses and temporary job loss made that possible - or apply for forbearance while we catch up, as Mickie said. Any advice would be greatly appreciated.

Re: American Residential Law Group Loan Modification with BOA

Lel — Thu, 07 Jan 2010 23:28:23 GMT

Intentionally missing payments to try to force a loan modification is not considered to be a good strategy, and it can't be undone if you don't get results. There's lots of people already seriously delinquent on their mortgages who are seeking modifications; deliberately adding yourself to that group won't necessarily make your case more visible.

By the way, what is your current interest rate? Is your loan fully amortized, or interest-only?

Let me see if I understand your financial situation. Previously, from March through October, you had a drop in income, which led to a missed payment. Did this eventually get paid? You mentioned that your property taxes were not included in your escrow until recently, which caused your monthly payment to go up. But these property taxes, whether included in escrow or not, still had to be paid by you. So your monthly home-related expenses didn't change, but the manner in which you paid them did. Am I understanding this correctly?

If your PITIA represents less than 31% of your current gross income, then there's really no grounds for a loan modification. Your mortgage would be considered to be affordable as it stands. A hardship that no longer exists (your husband has a job now, correct?) cannot be used to qualify for a loan modification.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Fri, 08 Jan 2010 00:03:17 GMT

Our rate is 7.125%, and we are upside down on our mortgage (loan is currently at $373,000, and our home's value has dropped to probably about $300,000 at most). Do you agree that perhaps I should try to ask for a 3 month forbearance instead, get caught up with the escrow? If my mortgage payment is about $2750 (minus our escrow), how does a forbearance work? About how much (approximately) would my monthly mortgage payment increase after the forbearance is done? We are about 3 years into the mortgage.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Fri, 08 Jan 2010 02:27:28 GMT

another warning here. Looking for a modification because you are underwater generally will go nowhere. it is very rare (except of course in all those radio and TV ads, that someone gets a principle reduction and that is usuall someone when the lender gets busted with bad documentation or there is a serious problem like death in the family. From all of your psots so far, there seems to be little cause for a loan modification, you just need to get the escrow caught up so the "extra' payment part is gone. technically, you should have had the money already saved for this for your taxes and it should not have been an issue (and will not be a factor in the bank giving or not giving assistance).

As far as missing another payment, once you are 2 payments behind, the bank will likely not accept less than a double payment until it is caught back up so there would be no point to it.

Re: American Residential Law Group Loan Modification with BOA

MattH — Fri, 08 Jan 2010 02:50:45 GMT

@Anonymous wrote:
Our rate is 7.125%, and we are upside down on our mortgage (loan is currently at $373,000, and our home's value has dropped to probably about $300,000 at most). Do you agree that perhaps I should try to ask for a 3 month forbearance instead, get caught up with the escrow? If my mortgage payment is about $2750 (minus our escrow), how does a forbearance work? About how much (approximately) would my monthly mortgage payment increase after the forbearance is done? We are about 3 years into the mortgage.

When was the loan taken out? That sounds like a rather high rate, what were the factors that made it impossible to get a better rate when you bought the residence? Have any of those factors improved since then?

Re: American Residential Law Group Loan Modification with BOA

Lel — Fri, 08 Jan 2010 04:51:03 GMT

MBerg wrote:
Our rate is 7.125%, and we are upside down on our mortgage (loan is currently at $373,000, and our home's value has dropped to probably about $300,000 at most). Do you agree that perhaps I should try to ask for a 3 month forbearance instead, get caught up with the escrow? If my mortgage payment is about $2750 (minus our escrow), how does a forbearance work? About how much (approximately) would my monthly mortgage payment increase after the forbearance is done? We are about 3 years into the mortgage.

It's still not clear what makes your mortgage unaffordable at present. Maybe some concrete numbers will help.

Your monthly principal and interest payment is $2750. Correct?

What is your monthly property tax and homeowners insurance escrow payment?

You mentioned an escrow shortfall in the past - by how much did this increase your monthly payment?

What is your monthly homeowners association payment, if any?

What is your current monthly gross (not net) income?

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Fri, 08 Jan 2010 14:10:55 GMT

Here are my answers:

•Yes, the principal and interest is $2750.

•Our regular monthly property tax should be about $320. We pay homeowner's insurance and association privately (association is $700 per year; insurance about $1400 per year).

•Our gross monthly income is about $11,000 (net $8574, plus my husband earns about $6,000 per year (about $500 per month) as an adjunct professor (so about $11,500 gross).

•We have not made that missed payment; we only missed that one month though, so I think we are continuing to show as 30 days late each month (I think each month, we are actually paying for the month before).

• My student loan is about to come out of forbearance, although I'd like to put it back in for 6 months (pay the interest IF I can afford it) and get my house situation under control. We can't lose our home -we have two children, etc. and want to do what we can to get ourselves back on track. Which is why I so appreciate your advice).

Let's see if I can explain the shortage in more detail than before though - although I don't understand it completely. It's long but hopefully you can follow.

Our lender decided to pay our '08 taxes for us in March, when we were due to pay (we usually incur the little bit of extra fee to pay our taxes within the allowable window - instead of right away in Dec - because we have always used our income tax refund to pay. However, our income tax refund fell short in 2008; to top it off, when my husband lost his job we were trying to figure out a way to pay, which was why we didn't pay the lender right away for their advance of our property tax) We realize this wasn't smart, of course, but we're just trying to find a way to rectify our mistakes.

Our lender then said that our taxes would now be escrowed going forward. So, in addition to having the regular '09 payment (based on our '09 tax bill that should have been about $311 per month - plus the additional amount per month to catch us up from Jan-March, before our taxes were escrowed), we had to start paying them in increments for the '08 taxes they paid for us in entirety. We were paying $600 per month from April through December (minus the one missed mortgage/escrow payment in October - which we still have not made up).

Our 2008 taxes that the bank paid for us were approximately $4300 (I don't have the bill right now but that's my recollection). Our 2009 taxes were $3750 or so. From April through December 2009, we paid $4800 (we paid $600 per month: $468 of that payment would have gone toward the 2009 taxes, as I understand it - since we were beginning the 2009 escrow payments 4 months late into the year - and $132 of that $600 would go toward the missed 2008 taxes). That would be a shortage, at this point, of $3250 (our payments into escrow for the 8 months would be enough to pay our 2009 taxes completely, and a portion of 2008 taxes).

I mentioned we were paying $600 per month toward escrow. However, somewhere between July and October (I'm trying to find my statements from August and Sept), our escrow payment somehow was increased to $924 (I'm assuming to make the repayment of the advanced taxes faster; they had allowed us initially to make smaller payments). However, I don't know why the shortage itself would increase since we were paying enough to cover '09 taxes and some of '08 advanced taxes; we received a notice this week that we actually have an $11,000 shortage (give our take in the hundreds place - my husband has the bill with him so I'm writing from memory). I don't understand this (he is placing a call into the lender). We obviously need a breakdown for us.

So, what is making it unaffordable for us is - they are having us pay that $924 into escrow and then another $311 or so into escrow - making our total mortgage payment beginning in February about $4,000 (as opposed to the $3060 we would pay normally to cover our mortgage and regular escrow/tax payment). We could pay the $3200 or so to cover that shortage that WE THINK we should have at this point (we would still need to pay for that one missed mortgage payment...but we could pay all the missed escrow at least). But we don't understand that additional $8800 or so, or our increased escrow payment.

Re: American Residential Law Group Loan Modification with BOA

Anonymous — Fri, 08 Jan 2010 15:06:06 GMT

I was mistaken about one fact: I'm looking at my statement from January, and see that I began making this $600 escrow payment then. So, my lender must have paid my 2008 taxes in December (even though we had until March), and it would have been lower than the $4300 in taxes. I would think my shortage should be smaller than I originally thought. I am having trouble locating some of my statements, but will be looking this weekend; I can probably get them online too. But since I found the January 2009 bill, and I see many of my 2008 bills without an escrow payment, I now realize the bank must have paid for these taxes in December.

Re: American Residential Law Group Loan Modification with BOA

Lel — Fri, 08 Jan 2010 20:26:24 GMT

Okay, that's quite complicated, and quite an impressive effort at laying it all out.

For the purposes of whether you would qualify for a loan modification, I don't know whether your lender will add your tax obligations for 2008 to you current obligations. That is, they may just look at what your ongoing monthly payments would be without factoring in your shortfall in tax payments for the previous year. The additional payments for back taxes will eventually stop. After that, your monthly obligation will revert back to your PITIA for the current loan.

Looking at the PITIA without considering your added escrow responsibilities, you have P&I $2750 + property tax $320 + insurance $117 + association fees $59 = $3246 per month. I just divided your insurance and HOA fees by 12. This represents less than 30% of your monthly gross income, even if you use the lower $11,000 figure. So your mortgage, in the absence of the additional payments, is technically affordable, and thus it seems less likely that you will receive a modification.

I can see how your escrow would have gone up from $600 a month to $924 - if only $132 was going to pay your 2008 taxes, then it wouldn't be paid off for a couple years. So perhaps your lender increased the escrow to make up for the shortfall. But are you saying that they increased the amount further, by an additional $311? I don't understand what that would be for.

The big question, as a I see it, is where all this escrow money is going, and why your shortfall is so large. It doesn't make any sense if you only missed one mortgage payment and only have to pay back taxes for one year. I think you definitely need to get an accounting of how they got this number.