The three most important questions you will need answered before beginning the loan modification process with Bank of America:
1. Investor Type
2. Foreclosure Status
3. Making Home Affordable (HAMP) Participation
Where did the money come from? Many people believe that it's Bank of America that put up all the money to buy their home, because they send their mortgage payment to Bank of America every month. This is not true in most cases. (especially if your loan was formerly with Countrywide) Most of the time BOA is only servicing the loan for another investor and the investor is almost always where the final decision on modification will come from. One of the first questions you should ask is the investor type on your loan. Customer Service will be the best department to call for this answer. The answer you get will normally be Fannie Mae, Freddie Mac, FHA, Core Account, or Private Investor.
The options on your loan rest entirely on what programs this investor participates in and Bank of Americas job in the modification process is simply to carry out the investors orders and protect their interests at all times. In fact, they have a legal obligation to do so. If you know right off the bat who the investor is and what they participate in, it could save you countless hours of frustration trying to qualify for a plan that is not even eligible for your loan.
Has the loan entered into active foreclosure and if not, when will it? This is something you should ask every time you call Bank of America throughout the modification process. Most of the time the foreclosure process continues to progress even as the loan modification process is carried out. The two are not handled within the same department and until you have an approved loan modification, you will always need to be aware of exactly how behind the loan is. If it looks like the process will take long enough that you fall more than 90 days behind, you will want to seriously consider submitting a payment to "buy another 30 days" to work through the modification process. If possible you will always want to avoid letting the loan go into active foreclosure. If the loan has already been placed into active foreclosure, its not the end of the world. In most cases you will not be able to make your regular payment to Bank of America once the loan enters into active foreclosure. The only two options at this point will be to either reach an agreement with BOA, or bring the loan all the way current out of your pocket. If you find yourself already in foreclosure you need to begin a loan modification review immediately to keep the past due balance from growing too high. The legal fees they tack on during active foreclosure can be extreme and the longer it goes the more you will be potentially adding into your loan when they modify it.
Is the loan eligible for Making Home Affordable (HAMP)? Making Home Affordable (HAMP) is a great program designed by the Obama administration. For most this is hands down the best modification program to save you money. Bank of America services loans for many different investors and some may not participate in these government programs at all. You need to ask them this question from the first phone call. If your investor doesn't participate in Making Home Affordable (HAMP) you need to make sure that you begin having the loan reviewed for "other options" right away. It sounds crazy but there are thousands of people that spent months working with BOA on a HAMP modification, only to find out in the end it was never even possible from the beginning.
In conclusion Knowing the investor and all the modification options they offer is key to success with the Bank of America modification process. This will make sure you don't end up on a wild goose chase, which is common with a lender as large as Bank of America. You must always be aware of how far behind the loan is and take control of this yourself by keeping it out of active foreclosure. There is never any advantage to letting your loan continue to fall further and further behind, act as soon as you can and you just may save yourself tons of money, now and in the future.