I received a letter today stating that my request for modification was being denied. What I am posting today are my responses.

July 30, 2012

Mr. Patrick Tadie

Bank of New York Mellon

Dear Mr. Tadie:

In your white paper Rebuilding the Mortgage Market-Loan by Loan you state that investors must become  more of “an activist in their examination of the underlying loans” down to the performance of “specific borrowers”.  Perhaps you only intended that to mean at the time of origination, or even securitization, but given what has happened to the housing market, I find it plausible that retention might very well be as critical as origination. 

Underwriting guidelines are quite specific under the government’s HAMP program. Given that it is a government program those guidelines are naturally flawed, but at least they are published. The dissemination of that information allows a thriving industry of professionals to engage in the modification process to assist homeowners in retaining their homes, and lenders to realize a recapture of those loans which would otherwise have proceeded to foreclosure.  I am one such borrower, and the purpose of my communication today is to seek your assistance in connecting me with the appropriate individual at BNY Mellon with whom I might discuss the denial of my request for a mortgage modification as submitted by Bank of America. 

After quite literally hundreds of hours working with my servicer over the course of the last 18 months, I was informed today that I would not be eligible for a modification because my loan did not fit the underwriting guidelines. Specifically, I was told this was because we were deemed to not be in need of assistance due to a low DTI. When I inquired about what the underwriting guidelines were for determining that DTI I was told that they were using both the government guidelines for the HAMP program and also those under what was called the “Global Settlement” for private investors.  Furthermore, I was told that the ratio isn’t really so much a true DTI as it is a first mortgage only housing ratio (ie it does not take other verifiable debts into consideration). I have been a mortgage underwriter, and this strikes me as absolutely ridiculous. If other verifiable debts or expenses are considered at the time of originating a loan, why would they be excluded at the time of a request for modification?  I would like to have an opportunity to review those guidelines for myself. Surely that isn’t too much to ask of somebody who is about to lose their family home.

Bank of America’s only advice to me at this time is to seek out a realtor who can assist me with a short sale.  I don’t want that. I suspect you don’t want that either.  Let’s see if we can’t work together on this. We fell on hard times due to a two year employment gap, and the gap came at a very heavy cost to us, but we have done our level best to meet our financial obligation with BNY Mellon. As a matter of fact the only reason we are so far behind in our payments now is because Bank of America stopped accepting them. They’d rather go to foreclosure. I can't help but wonder if you genuinely feel that serves BNY Mellon's interest. It doesn't seem like Good Housekeeping to me.

Sincerely,
De Aun Tollefson
P.S. You can read more about our personal circumstances in my blog post “How the American Dream turned into a National Nightmare” at  http://distressedhomeownersusa.blogspot.com/

http://www.bnymellon.com/foresight/pdf/rebuildingmortgage.pdf