Bank of America Loan Modification Obtained for Homeowner Located in San Diego, CA

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The Law Offices of Michael Gaddis recently obtained a final Bank of America loan modification for a homeowner located in the 92113 zip code of San Diego, CA.  The final loan modification deferred $187,410.22 into a non-interest bearing balloon.  The new interest bearing principal balance of $437,290.51 will be charged an interest rate of 4% which shall remain fixed for the remainder of the term.  In order to provide the homeowner with an affordable payment Bank of America amortized the $437,290.51 over forty (40) years but left the maturity date at twenty-four 24 years resulting in a 2nd balloon of $265,532.05.  The total balloon due by the borrower at the maturity date of the loan modification is $452,942.27.  Balloons are a valuable tool that allows lenders to create affordable payments.  If the investor of the loan is unwilling to cut principal the only other way to make a drastic reduction in the homeowner’s payment is to stretch out the amortization and defer principal to the end of the note.  Had the investor been unwilling to allow for non-interest bearing deferments or balloons resulting from increased amortization periods the Bank of America would never have been able to create an affordable payment for the homeowner.  Although this particular homeowner would have preferred a principal reduction her ultimate concern was keeping her house with an affordable payment and that is exactly what this Bank of America loan modification did.

The new principal, interest, taxes and insurance payment (“PITI”) of $2,144.75 represents an over $850 per month reduction from what the homeowner’s PITI payment was prior to becoming delinquent.  Additionally, the property is 2 units and since the homeowner rents one of the units out this modification makes perfect sense for her.

As always Michael Gaddis and his staff will continue to monitor the homeowner’s file in order to ensure that Bank of America receives the final Bank of America loan modification paperwork; that Bank of America uploads the modified terms into their system; and that Bank of America returns the homeowner’s file to regular servicing. To view a copy of the Bank of America loan modification referenced in this blog as well as other Bank of America 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/