Well today more than ever, homeowners all across America are being faced with the horrible threat of foreclosure. The main reason behind this is that many people have unknowingly been put into fradulent loans that have caused them to become deliquent on their mortgage payments.
The number one most effective way to prevent foreclosure today is applying for a home loan modification. By doing this you may be able to catch up on all of your late payments to become current, lower your monthly interest rate, or even change the terms of the mortgage loan completely. But one problem many homeowners seem to have is that they just simply are not sure how to apply for a loan modification.
Before applying for a loan modification you must have a financial hardship that is causing you to have problems paying your mortgage. Your lender will require you to write in detail a hardship letter proving the reason it is getting difficult to pay your monthly mortgage.
When writing this letter make sure to be as honest and detailed as possible, but do not make it too long. Remember these lenders are overwhelmed with modification requests and do not have the time to read over a four page letter.
Below you will find a list of examples that lenders will consider a significant hardship:
- Reduced Income
- Loss of Job
- Death in family
- Military DutyHigh Medical bills
- Significant damage to Property(such as vandalism or natural disaster)
- Rate adjustment
After completion of the hardship letter get together all of your financial information including your most recent paystubs, bank statements, tax returns, etc. You will be required to send your lender all of this information when first applying for a loan modification.
Now that you are prepared to send in the required information your ready for the first initial request to your lender. I suggest to call in and let them know that you are requesting a loan modification and give a brief explanation of your hardship. They will then ask you to fax in all of this information (most likely to loss mitigation) and the process will begin. Be prepared for a long ride.
Key when applying for a loan modification is to have patience.
This process can easily take anywhere from three to four months and possibly more in some situations. Even if you feel like your a perfect candidate for a loan modification you will still have to go through the entire process, and it is not guaranteed as we have seen on many occasions. Always be very polite but firm as well each and everytime you communicate with your lender.
If you are one of many who have heard and are aware about Obama’s new Making Homes Affordable (MHA) program, please don’t give your hopes up. This program has been around for the past few months and hardly any homeowners have recieved help from it.
They have certain guidelines that many homoewners DO meet, but the banks are still denying these people for this program. With that said it may not be in your best interest to apply for this program.
To sum things up, you just need to make sure that you are polite, firm and consistent with follow ups to your lender on a regular basis.