Loan Modification Tips
Sometimes mortgages become too much for the borrower to handle. Circumstances change, and they’re unable to make their payments anymore. What should they do? Here are some loan modification tips to help in these situations:
- The first step is to look for professional help. When taking on your loan modification, unless you have previous experience, it’s best to get someone on your side who know how the process works. If you decide to go through an agency, make sure it is a credible, experienced business. There are plenty of scams out there, so look for things like BBB accreditation or other legitimate recommendations. Companies like these can make the procedure much smoother and less stressful for you.
- Get in the game earlier. Before loan modification was only available to homeowners who were in default. Now certain mortgage servicers will allow the borrower to move in the process when they are only 30 days behind on payments. Some will even allow it sooner, it just depends.
- Know who is holding the loan. This can help in getting a better modification because you know who you’re dealing with. Sometimes the loan is chopped up into different pieces and owned by multiple people. If that’s the case, the terms may not be as flexible because the bank has to get their pre-approval. Ask your mortgage servicer who has your loan.
- Don’t hide the truth when preparing your application. Though it may seem beneficial to exclude certain tidbits or bend the truth, it will only hinder the loan modification process and extend the time it takes to get approved. Make sure you have all the paperwork you need completely and accurately filled out.
- Make a good hardship letter. One of the papers you have to submit it the hardship letter, which tells how you fell behind. Make sure you fully explain the situation and how you got there, but keep it short.
- Have realistic expectations. A loan modification isn’t a cure-all, and you may not get the results you expected. Once you have submitted your case to the bank, it’s up to them to decide what the deal will be. If you can’t afford their offer, don’t take it. Show them where you’re at and what you can afford.
- Be patient. A loan modification takes time, and a snippy attitude will only prolong the process. If you don’t try to work with your lender, they won’t want to work with you.
- Talk to the right people. It helps a lot if you’re talking to the right department. The correct one would be ‘loss mitigation’, not ‘collections’.
- Get some clout. If you’re feeling ignored by your loan holder, ‘CC’ your senator or congressman in your communications. Even if your local politician doesn’t get involved, the lender doesn’t want to chance them intervening.
- Write down everything. Make sure you record every time you talk to your bank or get a letter or document. If you have this, it can help later on if you end up facing a foreclosure. It show that you did try to find a solution and may help you keep your house.
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