Bank of America Freddie Mac and Fannie Mae Denials for Modification Sent Out In Error due to ‘System’ Mistake

It has happened once again. Letters have been going out erroneously to borrowers with Bank of America letterhead stating the following:

Bank of America, N.A.
5401 N Beach St
TX2-977-01-34
Forth Worth, TX 76137

borrower name
address

Right corner will have notice date and loan number

Dear Borrower:

We have reviewed your request for a home loan modification under the freddie mac modification program. Unfortunately, your home loan is not eligible for modification assistance for the following reason(s):

Ineligible Mortgage. Your loan is not eligible for a modification because the loan-to-value (LTV) on your property (calculated as the total principal amount you owe on the loan divided by our estimate of the vlaue of your home) must be 80% or higher to qualify for the program.

We want to work with you to determine what other options may help you avoid foreclosure. If you remain ineligible for a home retention option and you cannot afford to stay in your home, the below alternatives to foreclosure may be available to you:

A Short Sale. With this option, you satisfy your mortgage debt by selling your home at fair market value, even if the sale is for less than what you owe on your mortgage.

A Deed in Lieu of Foreclosure. With this option, you avoid foreclosure on your home and satisfy your mortgage debt by voluntarily transferring ownership of your property to us.

These options have different requirements and guidelines, and not all loans qualify. Also, these options may offer financial assistance for your relocation and less damage to your credit than a foreclosure.

Important information about foreclosure proceedings.

Please call us as soon as possible to determine if you qualify for one of the options listed above. We are now returning your loan to normal collection activity, which could include referral to foreclosure and a foreclosure sale. Do not ignore any legal notices about your home. We may be able to postpone foreclosure proceedings; however, foreclosure postponement is not guaranteed and you will need to respond to all notices to protect your legal rights.

If you have any questions about the collection or foreclosure process, please call us. If you do not understand the legal consequences of foreclosure, we encourage your to contact an attorney or housing counselor for assistance.

We are here to help

We want to make sure you understand all options available to you. If you would like to discuss your options, or if your situation changes, please call 1.800.669.6650.

You may also seek assistance at no charge from housing counselors, who are approved by the U.S. Department of Housing and Urban Development (HUD), by calling the HOPE Hotline Number at 1.888.995.HOPE. Assistance in understanding this notice is available through the HOPE Hotline.

Home Loan Team
Bank of America, N.A

Bank of America, N.A. is required by law to inform you that this communication is from a debt collector. However, the purpose of this communication is to let you know about your potential eligibility for programs to help you avoid foreclosure sale.

Required Disclosures

Bank of America, N.A., is required by law to inform you that we are unable to fulfill your request for a loan modification and the federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, or age (provide that the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protections Act. The federal agency that administers compliance with this law concerning this creditor is The Office of the Comptroller of the Currency, Customer Assistance Group, 1301 McKinney Street, Suite 3450, Houston, TX 77010-9050.

Our credit decision was based in whole or in part on information obtained from an affiliate or from an outside source other than a consumer reporting agency. Under the Fair Credit Reporting Act, you have the right to make a written request, no later than 60 days after you receive this notice, you should call us at or write to us at:

Bank of America, N.A.
5401 N Beach St
TX2-977-01-34
Forth Worth, TX 76137

***********************
END OF LETTER

The letter is a mistake as the information for home value is being extracted from the home appraisal in the system at loan origination.

One homeowner received the letter after being approved and making one trial mod payment on a Freddie Mac standard trial period mod and the other homeowner received the letter while waiting for the decision on his loan mod application.

The homeowner should write a letter back in response asking for home value used to determine the loan-to-value and the source of the home value, especially if denied.

Read on.