Bank of America: The Loan Modification Devil or Just Another Idiot Bank?
Ahhh…another “Tuesday in the Trenches” of loan modification lunacy. Today, I’ve further confirmed my belief that Bank of America is completely incompetent. If your mortgage is serviced by Bank of America, and your attempting to qualify for a loan modification, it is imparetive that you read on…
As I’m sure you know, Bank of America is one of the largest mortgage servicers in the United States and quite possibly, the biggest bank in the World. While this accomplishment is nothing to sneeze at, it often leads me to wondering why they are so damned slow and inefficient when reviewing loan modification requests.
Like any large corporation, Bank of America’s primary concern is for it’s shareholders. In order to keep their shareholders happy with high stock prices, Bank of America must turn a profit. In order to turn a profit they must make more than they spend. Seems pretty simple so far.
However, none of the mortgage servicers, including Bank of America, were ready for the financial shit storm that derived from the credit and housing crisis. Even with TARP money and government regulated loan modification guidelines, the servicers had to put new systems in place in order to help the enormous amount of struggling home owners that may qualify for assistance.
At the begining of the crisis, a lot of the big servicers began downsizing departments and staff to soften the blow by reducing expenses. This is where things get a little bit interesting.
Does it Make Sense to Cut Staff When a Record Number of Homeowners Need a Loan Modification?
You see, Bank of America decided that this housing crisis wasn’t a long term problem and that it didn’t make sense to handle all aspects of the processing internally so they hired a couple third party companies to handle some of the paperwork. These third party companies go by the names Home Retention Inc. and the Hope Department.
These companies are used to send out pre-qualification packages when someone verbally meets the eligibility requirements for the Home Affordable Modification Program(HAMP). This package includes a documentation checklist, a Request for Modification Affidavit, a 4506T form, and a FedEx return envelope so you can send the requested information back to them as quick as possible.
Once they receive the pre-qual package back from the homeowner, they review it to make sure that it is a complete package before sending it to Bank of America for further review. This process of reviewing the paperwork before sending it on to Bank of America usually takes about 30 to 45 days. So, these third party companies are actually just paper checkers and the sad part is that they suck at checking papers and often request the same paperwork over and over again which becomes monotinous and often causes some homeowners to just give up.
After the file is deemed complete by the third party company it gets sent to Bank of America for further review. This further review consists of another set of paper checkers that actually work for Bank of America. This is the last step before the file moves on to an actual decision maker in the loss mitigation department. This second set of paper checkers usually have the fiel for 10 to 25 days before they verify the paperwork is complete.
Again, this all sounds pretty simple so far and it is. However, this is where we start to face a problem. Unfortunately, the documents that you send in, such as pay stubs and bank statements, are only good for 60 from the date on the specific document.
So, if you sent a fully up to date package on December 1st and your last pay stub was issued on November 19th, it is already 10 days old before anyone gets a chance to look at it. Same thing goes for your bank statements.
That means that by the time the third party company receives your documents the clock has already started to run. They are going to look at your 10 day old pay stub, and other documents, over the next 30 days before sending them to Bank of America. Using the pay stub example above, we’ll say that by the time your pre-qual package leaves the third party company and is sent to Bank of America, the documents are already 40 days old, at least!
Now, once Bank of America receives the completed Pre-Qual Package, it sits in line to be reviewed by another paper checker before it goes to a decision maker. If you remember from before, this review can take between 10 and 25 days.
Even when we take the best case scenario of 10 days, the documents are now 50 days old which leads us to the next hurdle…the decision maker themselves!
Each decision maker, commonly known as a negotiator or underwriter, is working with at least 200 other pre-qual packages. This basically means that they are not going to get to your file right away and usually, they don’t even pick it up for at least 15 days.
With that in mind, our documents are going to be 65 days old which is too old to be reviewed. This allows the decision maker to send the file back to the third party company to request updated documents only to go through the same shitty processing system once again. Talk about being stuck on a hampster wheel…what a nightmare!
The sad part is that this is only one of the many flaws that Bank of America exhibits on a daily basis. But what’s really nausiating is the fact that what I described above causes so many likely candidates to simply give up and not get the program that they clearly qualify for.
So, I want to provide you with the step by step process that I use to stay on top of these idiots and make sure that my files don’t get stuck on the hampster wheel of getting nowhere. It’s really simple but it’s kind of a pain in the ass…lol!
5 Important Precautions to Take WhenÂ Persuing a Loan ModificationÂ
Step 1 – Make sure that you follow up weekly with your mortgage servicer. The best phone Â number for Bank of America MHA status is 1-800-669-0102 but you may need to follow up with Â the third party company also and Bank of America should be able to provide you with those Â details
Step 2 – Make sure to fax in your bank statements and pay stubs as you receive them. But make Â sure that you obtain the proper fax number because if you send it directly to Bank of America Â and not to the third party company, you won’t get anywhere.
Step 3 – The 4506T form, which allows the mortgage servicer to get your tax transcripts from Â the IRS, needs the date updated every 90 days so make sure to mark your calander and send Â in a new one before the old one expires. Also, make sure to put a working phone number on the Â bottom of this form where requested.
Step 4 – Homeowners are nAtorious for not sending in all pages of their bank statements. Make Â sure to check if your stements have print on both sides and, if so, send both sides. IT DOES Â Â NOT MATTER IF IT IS A BLANK PAGE, IF THE STATEMENT REFERENCES PAGE 1 OF 6, YOU BETTER Â BE Â Â ENDING ALL 6 PAGES.
Step 5 – Make sure to sign and date page 2 of your tax return on form 1040. Most homeowners Â that file electronically don’t sign their returns. However, the mortgage servicer wants them Â both signed and dated in order for them to be considered complete.
I’m hoping that these tips will help keep you in the game and you won’t get discouraged by the process. If you pay attention to the news you’ll realize that only a fraction of the people that qualify for a HAMP modification are actually getting them and Bank of America seems to be the biggest culprit when it comes to erroniously declining homeowners for this program.
Good luck with your loan modification and if you need any assistance don’t hesitate to get a hold of me.