Seven Things to Loan Modification
Loan modification is the most requested solution to prevent foreclosure in this disturbed economy. Loan modification is the process of altering the original terms of a loan the borrower is finding difficulty in paying, changing them into ones more affordable to the borrower. The homeowner’s full effort, however is vital to the success of any loan modification.
The homeowner has to know all he can about loan modification. Provided below are seven helpful stuff a homeowner wanting to take loan modification should remember about how loan modification works.
1. Review Your Financial Status
Prepare your set financial statements including as they are the most viable reference of your current financial condition. Don’t forget to include a detailed list of your expenses like food, gas, credit cards and other financial obligations and input them in s spreadsheet and compute the average cost you incur on each item monthly and quarterly. Such is important not only for knowing your own financial position but it will also help you in answering the lenders questions on initial negotiations for your loan modification.
2. Hardship Letter
Ready a hardship letter of one or two pages wherein you will state clearly the reasons why you can no longer sustain making the payments based on the original terms of the loan and how a loan modification will help both you and the lender. Make sure you can prove whatever claim you put on the hardship letter.
3. Collect Necessary Documents
Gather all documents the lender may possibly require in reviewing your eligibility for loan modification. Such documents are but not limited to the following: paystubs and bank statements for past the 2 months; W-2 Form for last 2 years for the employed; Form 1040 for last 2 years if you're self employed; Rental Agreement if the loan is not on your primary home; most recent mortgage statement; and property tax statements.
4. Contact Your Lender
Call your lender and inform him of your current situation and your desire of getting a loan modification and paying up your loan. Borrowers a few months behind payments are preferred but even those who are not yet late on their payments can qualify for loan modification provided that they can prove a probable future financial difficulty.
5. Fill Out Paperwork
Once your request for loan modification is recognized, your lender will send you an information packet and a financial worksheet you can use to compute for your expenses. Attach the documents you have gathered to serve as proof. All these are necessary for your lender to be able to assess your financial situation and determine whether you are eligible for loan modification and if your are indeed eligible, come up with the loan modification scheme that suits you. Just remember that the paperwork should be able to prove that you will be able to make your payments on time after loan modification.
6. Written Agreement
Once review of your paperwork is complete, your lender will inform you whether a loan modification will be granted to you or not. If it will be granted, he will send you a document explaining the details of his loan modification offer and then you are required to answer whether you approve of it or not.
7. Stop Gap Repayment Plan
Once you accept your lenders loan modification offer you will be asked to start off a gap repayment plan and keep doing such until the loan modification goes through. The stop gap repayment plan may go on up to a maximum of 60 days during which your lender reviews your status, financial statement and documents to be able to ascertain the risks involved in modifying your loan.
While in the stop gap period, you should be able to provide proof that you will be able to afford the modified payments along with the other expenses incidental to loan modification. Only after completing such task do you have a chance of finally getting a real loan modification.
24VIPINC [http://www.24vipinc.com/loan-modification.aspx] will assist you in your loan modification attempts and CallComLeads [http://callcomleads.com/loan-modification-leads.html] will supply you with high quality loan modification leads.
The homeowner has to know all he can about loan modification. Provided below are seven helpful stuff a homeowner wanting to take loan modification should remember about how loan modification works.
1. Review Your Financial Status
Prepare your set financial statements including as they are the most viable reference of your current financial condition. Don’t forget to include a detailed list of your expenses like food, gas, credit cards and other financial obligations and input them in s spreadsheet and compute the average cost you incur on each item monthly and quarterly. Such is important not only for knowing your own financial position but it will also help you in answering the lenders questions on initial negotiations for your loan modification.
2. Hardship Letter
Ready a hardship letter of one or two pages wherein you will state clearly the reasons why you can no longer sustain making the payments based on the original terms of the loan and how a loan modification will help both you and the lender. Make sure you can prove whatever claim you put on the hardship letter.
3. Collect Necessary Documents
Gather all documents the lender may possibly require in reviewing your eligibility for loan modification. Such documents are but not limited to the following: paystubs and bank statements for past the 2 months; W-2 Form for last 2 years for the employed; Form 1040 for last 2 years if you're self employed; Rental Agreement if the loan is not on your primary home; most recent mortgage statement; and property tax statements.
4. Contact Your Lender
Call your lender and inform him of your current situation and your desire of getting a loan modification and paying up your loan. Borrowers a few months behind payments are preferred but even those who are not yet late on their payments can qualify for loan modification provided that they can prove a probable future financial difficulty.
5. Fill Out Paperwork
Once your request for loan modification is recognized, your lender will send you an information packet and a financial worksheet you can use to compute for your expenses. Attach the documents you have gathered to serve as proof. All these are necessary for your lender to be able to assess your financial situation and determine whether you are eligible for loan modification and if your are indeed eligible, come up with the loan modification scheme that suits you. Just remember that the paperwork should be able to prove that you will be able to make your payments on time after loan modification.
6. Written Agreement
Once review of your paperwork is complete, your lender will inform you whether a loan modification will be granted to you or not. If it will be granted, he will send you a document explaining the details of his loan modification offer and then you are required to answer whether you approve of it or not.
7. Stop Gap Repayment Plan
Once you accept your lenders loan modification offer you will be asked to start off a gap repayment plan and keep doing such until the loan modification goes through. The stop gap repayment plan may go on up to a maximum of 60 days during which your lender reviews your status, financial statement and documents to be able to ascertain the risks involved in modifying your loan.
While in the stop gap period, you should be able to provide proof that you will be able to afford the modified payments along with the other expenses incidental to loan modification. Only after completing such task do you have a chance of finally getting a real loan modification.
24VIPINC [http://www.24vipinc.com/loan-modification.aspx] will assist you in your loan modification attempts and CallComLeads [http://callcomleads.com/loan-modification-leads.html] will supply you with high quality loan modification leads.
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