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Florida couple almost lost modification for paying early

A Florida couple recently learned that their home was going to be foreclosed on because they had made their reduced mortgage payment early by one week back in December. And while Bank of America has since reversed this decision, the entire case goes to show that without any help the mortgage modification process can be somewhat confusing.

According to sources, the 70-year-old wife and her bedridden 78-year-old husband owe around $177,000 on their Florida home that is only valued at $133,464. And while the two were able to make their monthly mortgage payments for quite some time, due to the husband's expensive medical bills the two found themselves needing a modification to their mortgage.

After applying through the federal Home Affordable Modification Program their mortgage was reduced from $1,400 a month to $916 a month, with the first payment of the lower amount due on Jan. 1, 2011.

According to sources, instead of waiting until the first of the month, the couple sent in their mortgage payment for $916 on Dec. 23, 2010, and from there, court records show that the check was cashed.

However, after February's payment was not cashed for the signature being missing on the check, the couple learned that because they had made their first mortgage payment a week earlier than when it was actually due, the two could possibly lose their modification.

Worried that they would lose the modification that made it possible for the couple to stay in their Florida home the wife appealed to the bank and asked for their case to be reviewed. But, in July they received a letter from the bank's customer advocate that informed them that payments not made for the correct month, even if earlier, would result in the loss of eligibility to be in the modification program.

Luckily, since that July letter the bank has decided to let the couple continue on in the modification process, and admits to making an error.

And while for this couple the bank ended up reversing the decision to foreclose or take away their modification, their entire situation does shows that obtaining and keeping a modification can be somewhat confusing for the average homeowner, and highlights the important of having knowledgeable help when applying.

Source: KNSS News Radio 1330, "Bank of America Apologizes for Foreclosing on Couple Who Paid Early," Joshua Cohan, accessed on Aug. 24, 2011

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