How to Get a Loan Modification When the Bank Won't Help You
Getting a loan modification can give you a lower monthly payment to work with, but if your lender is unwilling to help, it can be very difficult to get your loan modified. The lender is ultimately the one that has to agree to modify the terms of your loan. While it can be challenge to get your loan modified, the government offers a program that can help change your lender's decision by offering financial incentives.
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Instructions
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Check to see if you are eligible for the Home Affordable Modification Program, or HAMP. HAMP is a government program that makes it possible for homeowners to work with lenders to get their mortgages modified. To be eligible for a loan modification through HAMP, the house must be your primary residence. You must have a mortgage payment that is greater than 31 percent of your monthly income, and the mortgage balance must be less than $729,750. You should also find out if your loan is guaranteed by Fannie Mae or Freddie Mac. If it is, your lender is required to participate in HAMP. If not, it is up to your lender whether it wants to participate in the program.
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Contact your lender and ask about the Home Affordable Modification Program. The loss mitigation department of your lender is likely who you want to talk to in this situation. You will then need to fill out an application to apply for the modification program. The lender will require you to provide documents that prove you are in the middle of a financial hardship, such as bank statements and investment account statements.
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Write a hardship letter that outlines why you are having financial problems and provide it to the lender. The hardship letter is a document that tells the lender why you are unable to make your mortgage payment and how a loan modification would help. You should ask for help, but avoid begging or sounding too desperate in the letter. The lender will then review the documents and submit them to the HAMP program.
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Wait for the approval from HAMP. Your lender will notify you if you have been approved. The lender will receive a payment from the program, and then your monthly loan payment will be lowered. At that point, you can begin making your new mortgage payment and remain in your home.
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