How to Get a Modification on Your Mortgage
To prevent the erosion of home ownership caused by high foreclosure rates in the U.S., the federal government has developed programs to help struggling families stay in their homes. Mortgage modifications are the cornerstone of this federal initiative. Congress has given mortgage lenders a mandate to help homeowners in crisis, and provides incentives for lenders that participate in loan modification programs. You do not need to pay a third party for this service.
Other People Are Reading
Things You'll Need
- Mortgage loan number
- Modification request form
- Income tax records
- Bank statements
- Income verification documents
Instructions
-
-
1
Review the eligibility criteria listed on the Making Home Affordable website to see if you meet the basic requirements for a loan modification. The federal government has a set of guidelines that lenders, borrowers and the mortgaged property must meet to qualify for a loan modification.
-
2
Contact your mortgage servicing company. Even if you are not seriously behind in your payments, you may qualify for federal programs designed to lower your mortgage payments.
-
-
3
Request a loan modification application from your lender. The modification agent will send you the application package by mail or direct you to a website where you can download the forms.
-
4
Review the required documents that you must attach with your application. Based on federal guidelines for modification programs, your lender will select the program that fits your current financial situation.
-
5
Collect all of the documents that your lender requires for your loan modification request. The package includes a checklist to ensure that you submit the proper documentation.
-
6
Complete each form in the application package that your lender provided. Sign and date any forms that require signatures. Write your mortgage loan number on each application attachment, such as bank statements and pay stubs.
-
7
Submit the forms to the address that your lender provides by mail using a secure traceable mailing service. The application address is usually different from the mortgage payment address. Some lenders provide a correctly addressed postage paid envelope in your application package.
-
1
Tips & Warnings
Even if you do not meet all the federal government's guidelines for a modification you can still discuss your situation with your mortgage lender. Options that are available from your lender are often enough to prevent the loss of your home.
A HUD-certified housing counselor can help you understand the loan modification process. They can also help you negotiate with your lender to find a solution that reduces your payment or creates more affordable mortgage terms.
Initiating a loan modification request does not cost the borrower any money, even if your lender is not participating in federal programs.
If you are struggling to make your mortgage payments, burying your head in the sand will not solve the problem. The sooner you take action the better.
References
- FreddieMac.com; Home Affordable Modification Program; June 2011
- Making Home Affordable.gov: Explore Eligibility
- CBS MoneyWatch.com; Act Fast for Mortgage Bail-Out; Kathy Kristof; June 2011
- Bankrate.com; New Rules Could Cut Your Mortgage Payment; Marcie Geffner
- Federal Trade Commission; Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams; April 2009
Resources
- Photo Credit Polka Dot RF/Polka Dot/Getty Images
