How to Apply and Qualify For a Loan Modification

Loan modification sounds simple enough: you basically ask your lender to change your mortgage terms on the basis of your financial hardship. If you’re one of the millions of American homeowners who want to stop foreclosure, it may just be the solution you’re looking for. If all goes well, you can get your loan modified within a short period of time and start getting your life back on track.

1. With the most brutal economy since the great depression, banks are now beginning to modify their mortgages in order to avoid more costly foreclosure process, and the U.S. Government is supporting these banks, even offering incentives to modify your loan...

Here are just a few examples of what can be done by modifying your loan!

A.  Convert Adjustable Rate or Pay Option Mortgage into a lower Fixed Rate loan (rates starting as low as 2.00%)

B.  Lower the rate on a high Fixed Rate loan C. Add your past due payments to the balance of the loan D. Re-Amortize your loan into a longer term of 30 or 40 years

2.  If you are behind on your monthly payments, your lender may take any past due payments and add these to your total loan amount and help you get back on track to making your monthly mortgage payments, without having to come up with a large lump sum of money to keep your home.

3.  A Loan Modification under the HAMP program may stop any foreclosure action before it is too late.

4.  Save your credit by reducing your monthly mortgage payments to an amount you can afford, thus allowing you to more easily make timely payments on all of your credit cards and other debts.

5.  To successfully modify your mortgage, you should learn how the process works from the banks perspective. Read this guide book to learn and understand the process.

6.  As with any government program, the paperwork can be extremely difficult and overwhelming. Submitting a bank ready loan modification package is the key for a quick, successful loan modification experience.

7.  It all starts when you make your first contact with your lender or servicer. By providing a fully completed bank-ready Loan Modification Package you are making a good impression and you are already one step ahead and on your way to a successful modification experience.

8.  When submitting your loan modification request, you will need a formal Loan Modification Request Letter, Income Worksheets, Expense Worksheets, Loan Modification Proposal, Letter of Hardship, signed Affidavit, and the contact information for submitting your request to your bank's loss mitigation department.

9.  If you have two mortgages, you will need two complete separate packages. Our system will automatically prepare these two submission packages and all of the required documents.

10.  If the lender loss mitigation department's information is missing or incorrect in our system, you can call your lender or servicer for this information. Ask for the “Loss Mitigation Department” or the “Loan Modification or Work-Out Department”

11.  You will need to follow-up with your lender or servicer until your file is assigned to a loss mitigation agent/specialist or negotiator. As soon as you file is assigned to this person, make sure to get their name, phone number, extension, and all information. Ask what to expect and when you can expect it. Take GOOD NOTES.

12.  When your lender or servicer offers you a loan modification, make sure it is sent to you in writing and carefully review the details. NOTE: The bank is always looking out for their financial interest first, so the best offer is not always the first offer.

13.  DON’T BE AFRAID TO NEGOTIATE! Always try to re-negotiate your bank's offer. Review our case studies or give us a call to learn and understand how aggressive banks can be.

14.  Take notes and use the task/reminder tool to stay on top of your loan modification.

Loan Modification Case Studies