Many homeowners seeking a loan modification to lower their monthly mortgage payments find the application process time consuming, frustrating and confusing. Thus giving up before the application is reviewed.
Several documents must be collected and sent to your mortgage company that paint a picture as to why you need a modification. This needs to be completed quickly and in a very organized fashion. There are hundreds of applications being reviewed, you need to be proactive and make sure your documentation gets to the right person.
Some TIPS on seeking a loan modification:
Call a local Realtor: They can answer questions; point you in the right direction and even do a 3-way call with your mortgage company to ask questions direct.
Submit All Documents That Prove Your Current Income. Income verification is critical, If you lost a job in June, don’t provide pay stubs from March. In addition to recent pay stubs and other traditional income sources, homeowners should also provide a document called a “contribution letter.” This letter explains the source of any household income that is not easily verified. For example, a servicer will want to know the total household income of a married couple, even if only one person’s name is on the loan. The letter could also include income verifying that you have a roommate that pays rent.
Submit Current Bank Statements. Recent bank statements allow your mortgage company to verify your income and expenses. This information enables the mortgage company to see your monthly expenses for food, utilities and other expenses and determine whether you will have enough money to make your mortgage payment.
Mail Your Documents to the Mortgage Company. Many people send all of their documents by fax or email. Postal mail is usually more reliable, especially if it’s addressed to the person you spoke with at the mortgage company. Faxes often get lost, even better, do all 3 methods.
Label Each Page With Your Name and Loan Number. Don’t risk your documents getting lost in the shuffle. Write your name and loan number on EVERY page of EVERY document.
Fully Explain Any Recent or Unique Income Changes. For example, a bank deposit may show a one-time transaction, such as an asset sale, cash gifts from family members or a bonus. Unless you explain this one-time increase in income, the servicer may not understand it and use this information to deny your loan modification.
Include a Timeline in Your Hardship Letter. Every application for a loan modification must include a “hardship letter” that explains the reasons for your request. But the letter must have specific dates explaining when an income loss has occurred. If a job was lost in your household on July 15 and the income will decrease by $3,000 beginning in August, your letter needs to provide these details.
Call Your Mortgage Company Every Week. Don’t wait for weeks after submitting your documentation to hear from your mortgage company. Call them WEEKLY! Take detailed notes, get the name of the person you spoke with, what is the date and ALWAYS ASK what is the timeline for the next step.
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