Wachovia Loan Modification

Wachovia is a North Carolina-based financial institution specializing in sub-prime mortgages and personal loans. With the recent real estate crisis, the bank has gained recognition for having one of the best mortgage assistance programs for defaulting homeowners. Its main service in this area is loan modification, a contract that permanently changes the terms of a mortgage to better suit the borrower’s capacity.

The Wachovia loan modification program allows borrowers to negotiate better rates with the bank while putting a stop to foreclosure proceedings. Mortgage modification is offered on single-family homes and condos used as the borrower’s principal residence. Borrowers also have to meet a 45% debt-to-income ratio, which means that the total monthly payments (including interest, taxes, and insurance premiums) cannot exceed 45% of their stated income.

The Wachovia loan modification process starts with a hardship letter submitted to the bank, explaining the circumstances of default. The situation must be temporary and unexpected, such as job loss, death of a family member, or medical emergencies. Other mortgage modification requirements include W2 forms, pay stubs, and bank statements showing the borrower’s current financial capacity.

Borrowers who don’t meet the requirements for a Wachovia mortgage modification can look into other loss mitigation methods, such as a short sale or deed in lieu. A short sale involves selling the house to an investor for less than the amount owed, and paying the proceeds to the bank as full payment. A deed in lieu, on the other hand, allows the borrower to simply turn the home over to the bank. These are generally considered credit-savers and make it easier for homeowners to get back on their feet.