How to Apply for the Mortgage Bail Out Bill
The federal government's Home Affordable Modification Program, also referred to as the mortgage bail-out bill, can help you keep your home even if you're struggling to make your current mortgage payments. The program provides financial incentives to encourage mortgage lenders and banks to lower the mortgage payments of homeowners who are going through financial crises. But to qualify for a modification of your mortgage loan, you'll first have to prove to your lender that you've suffered a financial hardship.
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Things You'll Need
- Copy of current mortgage loan statement
- Copies of your credit card bills and statements for other loans--including student, car and personal
- Copies of your last two months worth of paychecks
- Copy of your most recent federal income tax statement
- Copies of your savings and checking account statements
Instructions
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1
Copy the documents that you'll use to verify your gross monthly income and your monthly debt obligations. These documents include credit card bills, other loan statements, paychecks from the last two months, most recent federal income tax return and your bank savings and checking account statements.
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2
Call your mortgage lender and explain that you are going through a financial hardship that is making it difficult for you to make your monthly mortgage payments. Ask if your lender is participating in the Home Affordable Modification Program. If it is, as most are, request a loan modification through the program.
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3
Explain to the lender the nature of your financial hardship. You may have recently lost your job, had your work hours cut significantly or suffered an illness that has kept you from earning your regular salary, for example.
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4
Put in writing the reason why you can no longer afford your mortgage payments if your lender requests a financial hardship letter. Include in your letter your request for loan modification through the Home Affordable Modification Program.
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5
Send your hardship letter and the financial paperwork that you copied in Step 1 to your lender or bank. Your lender will then review these documents to determine if your hardship is severe enough to qualify you for a loan modification.
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6
Settle on a specific loan modification. Your lender could reduce the principal amount of your mortgage or lower your interest rate. Your lender could lengthen the terms of your loan so that your payment is lower each month. Your lender might even provide you with a penalty-free break from making your payment for three to eight months.
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Tips & Warnings
Even if your lender isn't participating in the mortgage bail-out program, you might still be able to persuade it to modify your home loan. Lenders can rework the terms of any of their mortgage loans at their own discretion as along as they still hold the loan.
