For Loan Modification: Requirements – Tips For What To Do

Chances are, either you or someone you know is behind on their mortgage payment. If this is you, you have several options and choices ahead of you to either keep your home or let it go. One option is bankruptcy, another is a loan modification. We are going to take a look at loan modification as an alternative to a foreclosure.

What Is A Loan Modification?
A loan modification is a retooling of your current mortgage so that in the end, you have a payment that you can afford. If you are going to get a mortgage modified you will have to convince your mortgage lender that it is a good idea for them to change the terms of your mortgage to let you stay in the home. How you convince this is with your hardship letter.
Your hardship letter should spell out what happened to you such that you are now in the situation you are in, and that you have gotten yourself on better ground and you can and want to stay in your home. Of course there are other details in a loan modification request. We are not going to cover them all here as each lender has their specifics, but we are going to cover some essential tips for getting your mortgage modified.

Tips To A Loan Modification Request

Start early – when you first know you have a problem call your lender. Also, you don’t have to be late on your mortgage to ask for a loan modification. However, it is up to your lender’s discretion as to whether you get your loan modified or not.
Get help or do it yourself – there is no right or wrong way to get your loan modification done. You can do it yourself, you can hire someone to do it, or you can use a non-profit HUD sponsored housing counselor to help.
Find out who your lender is – Chances are, you may be paying your mortgage company’s servicing company versus the actually mortgage lender. You need to know who your lender is so that you can contact the right people – your mortgage company’s loss mitigation department.
Tell the truth – It is critical that everything you say adds up. You will need to present your income documentation, tax returns, bank statements, and other pertinent information that your lender will ask you for. If you have a hole in your story the lender will most likely give you a hard time about it because in their experience people try to lie their way through a loan modification to get a lower payment when they really don’t need a lower payment.

Write your hardship letter – again, the hardship is very important for explaining what happened and to demonstrate that you have stabilized yourself and your finances so that the lender’s efforts will not be lost if they give you a loan modification.
Get on the phone with the loss mitigation people – When you call your lender about a loan modification, make sure you get on the phone with the loss mitigation department. The collections department will not be enough.
Be realistic – remember, the lender does not have to modify your mortgage, they are also not going to take a deal that hurts them more than necessary to put together a loan modification that makes sense for everyone. Remember, you don’t have to take a deal that the lender gives you if it doesn’t help you enough. Lenders to have flexibility, so make a counter offer if they give you an offer that is just too out of reach. The current trend is that lenders do not want anymore houses on their books so they are more apt to work with you if you can get to a place that makes sense for both of you.
Keep a cool head and be patient – Getting mad at the lender is not going to help your cause. Being persistant is different than getting mad. Remember, the buck stops with you in their eyes as you agreed to the mortgage that you want them to modify. Therefore, respect the fact that they hold the upper hand. Also remember that on the other end of the phone is a human being.
CC your politician – One potential way to get help with your loan modification is to get some help from your local politician. The last thing that a lender wants is bad PR, so if you have trouble with your lender let someone who can apply some political pressure listing in on your case.
Leave a paper trail, keep original documents – This is a vital key to your financial future and success with getting a solution that works for you. Make sure you keep originals and copies of copies of everything you send your lender or to anyone for that matter. Also, take detailed notes when it comes to dates, times, names, topics etc. The more you can document the better. Pretend that you are a private detective and it is your job to document everything associated with your case. The more you prove, the better your chances of your victory.

Hopefully the following information will help you with determining how to proceed with a loan modification.