What Criteria Does a Bank Use to Give a Modification Mortgage?
Homeowners who are able to make a monthly mortgage payment but unable to catch up on past missed payments, may qualify for a mortgage modification program. Contact your lender and discuss your inability to bring your account current. Lenders can evaluate your eligibility for loan modification programs, most of which are administered by the U.S. Department of Housing and Urban Development. There are certain criteria that must be met to qualify for a mortgage modification.
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Hardship
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To be eligible for a mortgage loan modification program, you must demonstrate hardship as well as the inability to stay current on your loan. Some examples of hardship that are taken into consideration by your financial institution include an extended period of unemployment or loss of income due to illness or injury. To work out a mortgage modification plan for you, your lender may ask for a hardship letter, outlining the events that caused you to fall behind in your payments.
Income and Expenses
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The loan officer conducts a review of your household income and expenses to determine if you are able to make a monthly mortgage payment but unable to bring your account current. You will have to provide documentation of your income, tax returns, and monthly bills to your financial institution so they may determine your eligibility for a mortgage modification program.
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Delinquency
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If your bank determines to administrator a loan modification through the Federal Deposit Insurance Corporation, one of the criteria is that you must be at least 60 days delinquent on your mortgage payment. If you are not at least 60 days delinquent, there still may be options available to you other than modification, such as refinance options.
Other Criteria
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To be eligible for a mortgage modification, the loan must not have been for an investment property or second home. If a foreclosure sale is pending on your property, you will not be eligible for a mortgage modification. Also, you cannot currently be in bankruptcy or discharged from Chapter 7 bankruptcy after the origination of the loan.
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