Today in our economic crisis many homeowners around the country are having a difficult time keep up on their mortgage payments. So to help out the homeowners who are struggling lenders are offering loan modifications to borrowers that qualify. This has got to be the number one most effective way for a homeowner to prevent foreclosure and remain in their home. If you qualify you can catch up on all late payments to become current and also lower your current interest rate.

Below are four easy do-it-yourself steps that can help you achieve a loan modification on your own:

1. Examine your current finacial situation. The very first thing you need to do before you apply for a loan mod is to analyze your current and future financial standings. While your current standings are very important, your lender is also going to review your case to see if this type of assistance is beneficial in the long run for themselves and the borrower. You need to really figure out if you can afford the home and just not the loan.

2. Time to write an effective hardship letter. Your hardship letter is going to play a major role as to whether or not you are approved for a modification. It is very important that your lender realizes that you are indeed currently facing a financial hardship(s). When writing this letter it is crucial that you prove your hardships by listing the events that have put you in this situation. You should also make sure to keep this letter short and straight to the point. No rep is going to sit there and take there time to read through a five page hardship. Remember these lenders receive thousands of loan modification requests a day, so do not make the letter any longer than one or two pages. Below are some common hardships lenders will take into consideration:

-Military Duties
-Income Reduced
-Job loss
-Death of Family member
-Serious illness
-Serious Medical Debt
-Serious Damage to Home(such as a natural disaster or possible vandalism)

3. Gather and calculate all of your financial information. Once you have completed your hardship letter it is now time to go ahead and start gathering all needed financial documents. Your lender is most definitely going to require you to send in your most recent bank statements, couple months of paystubs, and two years of tax returns. This information plays a major role as to whether or not you will qualify.

Another very important piece of information is your current monthly budget. Your lender is going to provide you with a financial worksheet to fill out all of your monthly expenses and income. This will help you calculate all of your info to see if you have a surplus left over or you are in the negatives each month and draining your savings. Once you have done this, if you are far in the negatives or have a good amount of cash left over each month, you will most definitely be denied for a loan modification.

4. Now that you have completed the following steps it is now time to pick up the phone and make your first initial contact to your lender. Make sure that you contact the loss mitigation department and let them know you want to apply for a loan modification. Ask what address to fed-ex your paperwork and what is the best number to fax your packet to. It is crucial that you get tracking numbers on your fed-ex package and also fax the information multiple times as well. you need to understand that all lenders are completely overwhelmed with modification requests due to our economic crisis. It may take a few weeks for them to even receive the paperwork you had sent.

The key is to be polite, persistent, but to remain firm at the same time.  Remember these lenders do not have to accept your loan modification request, so it is important you remain in good standing with their reps.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.