Consumer complaint received 2023-04-27
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: DC
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Struggling to pay mortgage

Complaint:
I have a Countrywide mortgage that originated in XXXX. Bank of America states that they service the loan for XXXX XXXX XXXX XXXX XXXX 

On XX/XX/XXXX Bank of America wrote to me ( letter attached ) : " After reviewing the new documents and information you provided to support your appeal, the loan is still not eligible for the following program ( s ) for the reason ( s ) indicated below. Since the reason ( s ) your loan modification wasn't approved hasn't changed, you may not request another appeal review. 

Bank of America Loan Modification Program : your loan isn't eligible for this program for the reason ( s ) stated below : Under applicable program requirements, we seek to reduce the monthly mortgage payment to equal a target payment that is a specified percentage of your gross monthly income through a series of steps that include evaluation of the impact of eliminating interest and amortization on a portion of the principal balance of your loan by forbearance of this portion ( subject to the requirement that it does not exceed a specified percentage of the amount of your loan. Because your gross monthly income of {$520000.00} is so low relative to the outstanding amount of your loan, the portion of the amount of your loan as to which we would need to eliminate interest and amortization would exceed the specified percentage. '' On XX/XX/XXXX XXXX XXXX XXXX, Bank of America Resolution Specialist, Regulatory Complaints, wrote to me in response to a Complaint I made to the Consumer Financial Protection Bureau ( letter attached ) : " On XX/XX/XXXX, Bank of America received a request to appeal our previous decision that this loan was not eligible for a loan modification. Further research indicates there was no additional information or income provided for the appeal, than what was originally submitted for the initial review. Our records indicate we used the average of XX/XX/XXXX and XX/XX/XXXX rental income to calculate the gross monthly income of {$5200.00}. Please understand that when considering rental income, there is a vacancy factor of 75 percent and debt services ( i.e. outstanding mortgage on a rental property ) that are accounted for. The enclosed letter dated XX/XX/XXXX, advised you the loan modification appeal you submitted had been denied. '' XXXX XXXX was the first person at Bank of America to explain to me that when considering rental income it had been reduced by 75 percent. This was not explained in the XX/XX/XXXX letter to me. All that was explained was that my " gross monthly income of {$5200.00} is so low relative to the outstanding amount of your loan, the portion of the amount of he loan as to which we would need to eliminate interest and amortization would exceed the specified percentage. '' The XX/XX/XXXX letter quoted a gross monthly income which was not correct and which had been reduced by 75 percent. I only had rental income for the months of XXXX and XX/XX/XXXX. I was never informed that the appeal needed more information and it was understood that all of the financial information I had provided was everything that I had. 

I was appealing the figure of {$5200.00} as not accurate. Nobody informed me that that amount was arrived at by reducing my rental income ( which was all of my income ) by 75 %. The appeal was to figure out how my income of over {$15000.00} per month had been reduced to {$5200.00}. 

If a customer earning {$20000.00} ( 4 x {$5200.00} ) or {$15000.00} ( 3 x {$5200.00} ) is not told upfront that their rental income ( which was my only income ) will be reduced by 75 percent and is not told when they are denied but only told when they file a complaint with the CFPB what does that say about how Bank of America is handling old Countrywide loans? Is this reasonable? Bank of America was not clear in their XX/XX/XXXX letter about how they arrived at such a low gross income and in factthe gross income figure of {$5200.00} was arrived at by reducing my gross income ( all of my income was from rental income ) by seventy-five percent. This was then used to state I would not be apply to afford the monthly modification payments. 

The normal industry standard is : " They usually use 75 % of your total reported [ rental ] income 25 % is subtracted to account for potential vacancies and ongoing maintenance. https : //www.valuepenguin.com/mortgages/claiming-rental-income-for-mortgage. 

In addition, My Countrywide loan has been the subject of different class action settlements and this settlement : https : //www.justice.gov/opa/pr/bank-america-pay-1665-billion-historic-justice-department-settlement-financial-fraud-leading https : //www.doj.state.or.us/media-home/news-media-releases/countrywide-settlement-fact-sheet/ The settlement states : These goals are achieved with a number of loan modification options, including : A reduction of the interest rate to as low as 3.5 % for five years, at which time the loan will be converted to a fixed interest rate set at the greater of the Fannie Mae rate or the introductory interest rate on the loan. If that rate is still unaffordable, the reduced interest rate can be extended for another two years ; A reduction of the interest rate to as low as 2.5 % with annual step rate increases, subject to a lifetime cap on the interest rate on the loan ; A 10-year interest-only modification, with an interest rate reduction to as low as 3.5 % for these modifications and yearly step rate increases, subject to a lifetime cap on the interest rate on the loan.

My Countrywide loan which has been at 6 percent since XXXX and has never been modified, is eligible for modification under the above settlement, following the above guidelines and should have already been modified. 


Thank you.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation