How Do I Get Help With Mortgage Bailout?

You can get help thanks to the mortgage bailout.

If you're a homeowner struggling to make your mortgage payments each month, you might be able to get help from your mortgage lender or bank. As part of its bailout efforts to help stimulate the economy, the federal government in 2009 launched its Home Affordable Modification Program, which provides financial incentives to encourage lenders to modify the loans of homeowners struggling to make their payments. Lenders can reduce the principal balance of loans, lower their interest rates or restructure their terms, all of which will lower the monthly payments facing homeowners. To get this financial assistance, homeowners must start by calling their mortgage lenders.

Things You'll Need

• Copy of your current mortgage loan statement
• Copies of your credit card bills
• Copies of your other loan statements, including student, car and personal loans
• Copies of your two most recent paychecks
• Copies of your most recent federal income tax return

Instructions

1. Prove to your lender that you have suffered a financial setback that has made paying your monthly mortgage bill impossible. Do this by making copies of the financial paperwork to prove that your monthly income has fallen while your debt obligations have not. Include your most recent federal income tax return, your two most recent paychecks (if you still have a job), credit card bills, other loan statements and savings and checking account statements.

2. Contact your lender or bank, using the phone number listed on your most recent mortgage loan statement, and explain that you have suffered a financial setback that has made it impossible to pay your monthly mortgage bill. This setback might be a job loss, drop in annual income or serious illness or injury. Request a loan modification that will result in a lower monthly payment.

3. Ask your lender if it is participating in the government's Home Affordable Modification Program. If it is, the modification process might move along at a faster rate. But even if it isn't, that doesn't mean that your lender won't modify your loan. Lenders do not have to participate in the federal program to rework the loans of their existing borrowers.

4. Write a hardship letter that explains why you need a loan modification. Include in the letter both your request for a lower monthly payment and the reason--job loss, drop in income--for your request.

5. Send your letter and the copies you made of your financial documents to your lender or bank. Officials there will study these papers to determine if your financial setback is severe enough to justify a loan modification.

6. Agree to a modification if your lender approves your request. Make sure, though, that the resulting monthly payment is low enough for you to afford.

References

• Home Affordable Modification Program: Eligibility
• Bankrate.com: Borrowers Looking to Score Modification