Bank of America said: "Our first priority is to help our customers remain in their home as demonstrated by the more than 775,000 permanent loan modifications completed since January 2008."
Well then maybe you can explain this.
I was contacted by a BofA screwee, er, "customer" yesterday with a wee problem. He's got some financial issues and is in the middle of a bankruptcy. The house is apparently not part of the bankruptcy proceedings.
Some time last year he made a phone call to inquire about a HAMP modification.
The original loan did not include impound for taxes and insurance ("escrow.") Suddenly, out of the middle of nowhere, BofA turns around and whacks him with a sixty percent increase in his payments, arguing that now he must pay escrow (despite the fact that the face of his note does not say so) and that he originally, at the time the note was signed, had more than 20% equity (and thus wouldn't commonly be required to do so.) Further, they're clearly trying to "pre-fund" the escrow account.
This is a guy with an active (but not yet discharged) bankruptcy. He clearly doesn't have a 60% increase in his payment, or he wouldn't be in bankruptcy.
Now, months later, nobody will talk to him and they're threatening to throw him out of his house. They also won't drop the escrow demand, claiming that any inquiry into a modification instantly and irrevocably forces you into escrowing.
Where did that come from? Isn't this "Contracts 101"? The original note is still in force and effect until and unless a new one is signed. If the original note provides that when you originated you did not have to escrow, how does the servicer get to unilaterally renegotiate that and demand escrow at a later date as the result of an inquiry?
I don't have the full set of facts on this case as of yet and will likely write more on it when I do. And I fully understand (and explained to this gent) that escrow doesn't change the money owed, just how it's paid. Of course if the bank is trying to pre-fund the escrow account then it's a problem - possibly a very serious problem for someone who's stretching to make payments to begin with.
Oh, and there's the usual chain of acts here too. When he called he was told he didn't qualify for HAMP as he was current, and if he wanted to be considered he had to be late. Then when he was a month late they told him he had to be three months late. And then once he was three months late (basically at their direction) they wouldn't work with him.
Haven't we heard this story before - hundreds of times?
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