How to Negotiate Mortgage Modification
Refinancing a mortgage loan during financial challenges may be difficult, but modifying your existing mortgage terms may be an option if you meet eligibility criteria. Contact your mortgage company to learn more about mortgage loan modification programs.
Other People Are Reading
Things You'll Need
- Your mortgage loan account number
- Letter explaining your financial hardship
- Copies of two most recent pay stubs for all borrowers
- Copies of two most recent bank statements
- Copies of last two years' tax returns and W2 forms
- Financial information sheet showing all monthly income and expenses
- Estimate of current home value
Instructions
-
-
1
Your mortgage company's loss mitigation department can assist with loan modifications. Know what you want to say before you call your mortgage lender. Gather the information listed and have it available for reference during your call. Prepare a list of questions for your lender. Keep a notepad, pens and pencils available for taking notes during your conversation. Call your mortgage company from a private location where you won't be interrupted.
-
2
When requesting a loan modification, state your hardship and propose solutions. When you call your mortgage company, ask for the loss mitigation department or foreclosure prevention department. Identify yourself and supply your mortgage loan number. Advise the representative of your hardship and ask for a loan modification. Maintain a professional, neutral tone and avoid being defensive, impatient or rude. Answer all questions to the best of your ability.
-
-
3
Provide requested information to your mortgage lender immediately. Explain how a mortgage modification can help you, and why. For example: I have just started a new job; I need help catching up on the three payments I owe, and could also use a lower mortgage rate. Tell the representative what you can do today. For example: I can send one payment immediately. Be proactive in suggesting solutions. Refer to your prepared information as you discuss options for modifying your mortgage loan. Write down any instructions provided by your lender's representative.
-
4
Loan modification terms are typically approved according to specific program requirements. Listen carefully to your mortgage lender's instructions. Assemble and send documentation precisely according to these instructions. Comply with requests for additional information quickly and without anger. Mortgage companies work with mortgage investors, government agencies and mortgage insurance companies, all of which have specific requirements for approving your modification.
-
5
When you receive written approval of your mortgage modification, review the terms carefully. Verify that all personal and contact information is correct. Review the terms of your modification including the new mortgage rate and monthly payment amount. Contact your lender immediately if there are errors or problems with your modification terms and documents. Otherwise, sign the modification documents exactly as your name(s) appear. Obtain witness signatures and have signatures notarized as required. Keep copies of modification documents with your mortgage documents.
-
1
Tips & Warnings
Avoid being defensive when dealing with your mortgage lender.
Avoid sharing personal opinions or information not essential to modifying your mortgage loan.
Cooperate fully with your mortgage lender's requests and instructions.
Ask for clarification if needed.
Your mortgage lender may not be able to meet modification terms you request.
You may not qualify for a mortgage loan modification.
Eligibility depends on the nature of your financial hardship and your ability to repay your mortgage loan after modification.
Modifying your mortgage loan terms may impact tax-deductible mortgage interest. Consult a financial adviser before requesting a loan modification.
References
Resources
- Photo Credit cell phone call image by Donald Joski from Fotolia.com au téléphone image by Claudio Calcagno from Fotolia.com office work image by dana nicolescu from Fotolia.com clock image by Alexander Potapov from Fotolia.com handshake silhouette image by Slobodan Djajic from Fotolia.com
