Bank of America Department of Justice Loan Modification DOJ with Principal Reduction Obtained for Homeowner Located in San Marcos, CASubscribe to Rss Feed
The Law Offices of Michael Gaddis recently obtained a Bank of America Department of Justice (“DOJ”) trial loan modification for a homeowner located in San Marcos, CA. Bank of America Department of Justice loan modifications can be life-changing due to the fact that these modifications have the ability to forgive substantial amounts of principal as part of the mortgage restructuring process. However, Bank of America Department of Justice loan modifications also have limitations. While Bank of America Department of Justice loan modifications have the ability to reduce principal balance to the fair market value and potentially lower the interest rate to a floor rate of 2%, this modification program does not allow for maturity date or amortization extension. Additionally, the housing-to-income (HTI) ratio of the Bank of America Department of Justice loan modification program is very broad allowing Bank of America to find a target PITI payment within a wide range of a person’s gross income. The result sometimes is a big principal reduction but a PITI payment higher than what the homeowner anticipated.
In this case, the homeowner’s trial plan states that the homeowner will receive a $223,749.76 principal reduction contingent upon the successful completion of the trial period. The trial payment of $3,116.44 represents an over $400 a month reduction from what the homeowner was paying prior to becoming delinquent. Although the principal reduction was huge, since the Bank of America Department of Justice loan modification program does not allow for an amortization extension the resulting payment was higher than the homeowner expected. Nonetheless, the homeowner and her husband were ecstatic to receive such a large principal reduction that allowed their home to become an asset again.
As always, Michael Gaddis and his staff will continue to monitor the homeowner’s trial period in order to ensure that a final Bank of America Department of Justice loan modification is obtained. To view the Bank of America Department of Justice loan modification document referred to in this blog as well as other loan modifications obtained by Michael Gaddis please click the following links: http://californialoanmodificationattorney.com/trials-modifications/ and http://californialoanmodificationattorney.com/trials-modifications/approved-trials-modifications-pg-2/