How to Get a Loan Modification Approved
Getting a home loan modification approved takes a lot of due diligence on your part. A loan modification is an agreement that is negotiated with a home lender when borrowers are facing financial difficulties. Borrowers must show a valid reason for a decrease in their income such as a laid off, an illness or a separation, which has caused a temporary decrease in income. Borrowers must also submit a resolution to their financial situation with an explanation of how the financial situation will improve. To get a loan modification approved, follow the steps below.
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Instructions
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Go to your home loan lender's website. There should be an information packet to download for a home loan modification. If you cannot find this information, call your lender and ask how to get the necessary paperwork to get a home loan modification.
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Make sure to fill out all the paperwork completely. There is a lot of information necessary for a home loan modification. Typically your home lender will require one to two years tax returns, a detailed income and expense sheet, a hardship letter, two months paycheck stubs, a profit and loss statement if you're self-employed and copies of your last six months bank statements. When writing the hardship letter, make sure it is no more than two pages long. Write down the reason or reasons why you need the home loan modification, write down your future plan to increase your income and improve your situation, and write down how important it is for you to keep your home.
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You must be proactive and stay in contact with your lender after sending in the paperwork. Many lenders are flooded with home loan modification paperwork, and it could take several weeks or more to process your paperwork. Make sure to note the date you faxed or mailed your home loan modification paperwork. Call your home lender once a week to find out what the status is on your paperwork. Keep detailed dated notes of whom you spoke with and what you discussed. Ask him or her if there is any other information needed. Most lenders are giving more priority to loan modification applications when the borrowers are seriously delinquent.
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Keep in mind that when you call your lender, you want to make sure to ask what department you are talking with. If you call the phone number for collections, you will most likely be speaking with someone who wants to collect your mortgage payment or payments if they are late. The person may be reluctant to transfer you to the loss mitigation department. Try to get transferred to the loss mitigation department and get their direct number. Sometimes it's necessary to call several times before you speak with someone who can help you with you home loan modification paperwork.
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Ask your lender if there are any workshops they are involved with where you can get more information about your home loan modification. There are many honest agencies that work with lenders to help people stay in their home. Go to a workshop as soon as one is available in your area. Find out if there will be a representative from your home mortgage lender present. Go to the workshop and bring all the necessary paperwork.
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If you feel like you want to get help from a professional to get your home loan modification approved, make sure to find a reputable company. There are many unscrupulous companies scamming people out of money by making empty promises to easily get their loan modification approved. See the resource section below for the article, "How to Find Honest Loan Modification Companies."
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The most important steps to getting a home loan modification approved is being organized and prepared with all your detailed financial information and staying in contact with your lender.
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When you are approved for a home loan modification, be prepared to pay your home lender some of the delinquent payments.
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Check out the resource section below for links for more information about getting a home loan modification approved.
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Tips & Warnings
If you are behind on your payments, save as much money as you can.
Do not give anyone or any company your mortgage payment money unless you have prior approval from your lender.
