How Anyone Can Get A Loan Modification Approved

Hi Homeowners,

Recently I have noticed many posts on forums and blogs regarding loan modifications.

Alot of this information guides distressed borrowers to seek help from HOPE.

There are many organizations out there with the HOPE acronym in their titles. The most popular one is 995 HOPE.

Keep in mind that these organizations are only going to assess your finances and give you some advice. IF THEY think you qualify then they will contact your lender and try to help you get a modification.

I have seen many homeowners who were initially told by these well meaning individuals that they didn't qualify and should short sell their homes. Only to find out later that they indeed could get a loan modification.

Often I see suggestions that recommend an attorney, and if you are facing an imminent foreclosure that is probably the best advise.

A few things to know about modification:

The numbers you send to your bank have to make sense. Write them down on paper and do the math.

If you are not able to demonstrate an ability to make payments AFTER a reasonable modification (5 percent - 6 percent 30 year fixed) you will not get one approved.

Depending upon your lender, there are a number of ways they will work with you. I have personally negotiated with most of the lenders and servicing companies left in the market.

When you call your lender they will offer to send you a package to fill out. Don't be discouraged. If your lender said they were going to send a package, they will and it should take 3 - 5 business days to recieve it. If you haven't received it in a timely manner, follow up by telephone.

Most importantly you can begin to take control right now TODAY. Gather the following:

Last 4 paystubs for everyone in the house who earns money.If you don't have paystubs, you will need a cash letter from the wage earner defining what they take home monthly. (Yes your lender WILL accept this)(It's in their best interest).
2 years W2's for each wage earner in the home.
2 years tax returns
2 months bank statements - (PSST... If you have big bucks in the bank, your modification will not happen!) Your lender will require ALL pages of your statements. If you don't have them, go to your bank and get a 2 month printout, make sure that someone in the branch stamps and signs the printout or your lender may not accept it.

That should be the extent of documents you will need to provide to your lender. (unless you are self employed).

The above documents will be required to be submitted to your lender. Make copies of them now so you are prepared and ahead of the game.

YOU CAN DO THIS!!

Now gather ALL of your bills and make a COMPLETE list of ALL of your monthly expenses, food, transportation, tolls, gasoline, heating bills, electric bills, water bills, trash & sewer bills, car payments, all forms of insurance, child care, tuition, camps & clubs, school lunches, pet food, etc.

Absolutely every dollar you spend needs to be accounted for, lest you underestimate your living costs and negotiate a modification that won't work.

OK... Now your rolling!

Get your totals down on paper and do the math. You may very well be in the red CURRENTLY, but calculate what your new payment would be and do the math again using your new modified payment. If you're above water with the new number you are well on your way to a new life, with one less worry.

If you want more guidance I am here, and would be more than happy to help. I have negotiated MANY, MANY modifications with lenders and know the ropes.

I do not think the average person needs a professional to negotiate a modification, unless the time frame for foreclosure is closing in.

My experience with MOST attorneys is that they are aloof, unreachable, unresponsive and condescending. If you can find one with empathy God bless you, but you don't need a professional to get a modification from your lender.

Note to self and YOU:

If you are in danger of iminent foreclosure then you need an attorney right away.

Get Ready, Get Educated - Get Modified and Get on with your life...

GOOD LUCK!!

Once the income and expense situation is in hand you will need to put together some other info:
Monthly Income & Expense Letter
Hardship Letter
Loan Modification Proposal

There a number of acceptable hardships and you should review them to see which ones apply to your situation.-
Adjustable Rate Mortgage Reset-
Payment Shock-
Death of Spouse of Co-borrower-
Damage to Property (natural disaster or unnatural)-
Divorce-
Failed Business-
Illness-
Job Relocation-
Loss of Job-
Incarceration-
Marital Separation-
Military Duty-
Medical Bills-
Reduced Income-

Your loan modification proposal should lay out concisely each piece of the modification you are requesting, ie; principal balance reduction, interest rate reduction, waiver of fees and penalties, payment deferment or forebearance, and other info.

I have sample proposals, and letters in my book and CD, and have laid this out in explicit detail so that the average person can understand it.
I am not hocking my book, just letting you know that there a number of them out there that can help lead you through the process.

If you are going to attempt this yourself you should get one. Costs for these runs from $40 for e-books up to $395 for kits sent to your home.
Always remember banks do not want to foreclose on your home. They take huge losses on foreclosed properties.

If you are behind on your mortgage, loan modification may be the perfect solution. Many a distressed homeowner have negotiated a loan modification and saved their family home from foreclosure.

You can too!

DAN HARRIS - ALL RIGHTS RESERVED 2008

Dan Harris owns and operates The Home Retention Group, Harris Capital Management and Mobil Settlement, LLC in New York and can provide detailed information on Title Insurance Issues, Mortgage related info, Loan Modification negotiation, New York real Estate and more.

He can be reached at LoanModBook.com , or CashDan.com or TheHomeRetentionGroup.com