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Loan Modification – The Best Chance for Success

This week we are discussing a painful, but important situation that a lot of American consumers are facing. It is so scary to think that you might lose your home, but we want you to know that there is hope. We want to be a resource to those folks because we have been there and understand how scary it can be.

There is a lot of misunderstanding surrounding the Loan Modification process. We are here to shed the light on these myths and provide the resources necessary to get you a lower payment. Here are a few important tips that will help you complete your objective.

 

1. Be Kind. As the old adage goes, “One gets farther with honey than with vinegar.” You mortgage lender is not like the collection agents that hound you day and night. They are civil and most really want to help. The best way to get what you want is to make the person on the other end of the phone your best friend.

2. Understand The Process. If you go in with intelligence and explain to the Loan Modification Dept. your situation, the chances are actually pretty good you will walk away with a lower payment. The good news is that they do not want your house, they just want your monthly payment.

 

3. Have your paperwork ready. This will be the most impressive thing you can do. If you are prepared they will be much more likely to work with you.

 Here is what they are going to require:

           1. Hardship letter – This is an important piece to the puzzle. Type it up so it looks professional. The letter needs to include the reason for your request (i.e. job loss, sickness, divorce), why you feel you  should qualify for  a lower rate, and that you are willing to do what it takes to maintain your home. Budget – Many times they will go over the budget during the initial call so have this ready to read to them. Also, fax it with the other information.

           2. Pay Stub – They are going to require proof of income.

           3. Tax Returns – You are going to need to prove your income for the last two years.

           4. Bank Statement – Usually they need at least the last two bank statements.

4. Ask Questions. Be proactive and ask for the next step. They receive a lot of request so you will need to give them time to do their job, but you don’t want to get lost in the avalanche of paperwork.

5. Keep paying your mortgage payment. Do not expect to be able to skip a payment. The Loan Modification approval is based on you continuing to pay your payment on time.

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5 Responses

  1. Hello,
    Thank you for posting this article dated April 30, 2008 at 4:10 pm. I have some info that you may be interested in hearing. I’m a homeowner and Washington Mutual services my adjustable rate loan mortgage. I requested a modification following every step you listed in your article. However, WAMU sent me a denial letter stating they could not help me because my rate didn’t change, which is 10.85%. and to reply again in November. When I called them, a rep advised me that my denial was due to me making my payment on time every month so they skipped my loan for modification consideration. But I borrowed the money to make my payment, which they know from my hardship letter. Therefore, the rep advised me they could help me if I skip two monthly payments. Then during our conversation, I found out that the rep was a supervisor. Since then I’ve called back to confirm It’s ok to miss my July’s payment and they are fine with that. They advise me to call back when I’m two months behind. Then I should qualify.
    I could be wrong, but is this a good way to practice business?

  2. Here is my SUCCESS story with Chase. I applied for a mod in December ‘07 and they lost my file. I had to do it again in January. Then, after two months and calling weekly it was “at the underwriters.” After two more months and weekly calling I was being put on a priority list because so much time went by. Finally, a week ago I was successful. I heard I had been approved and the people on the phone really couldn’t tell me what the terms were. Today I got a simple letter:

    Your old rate of 8.69% (this was the arm it really started at 6.7% for 2 years) has been modified at the fixed rate of 5.375% for the balance of the loan.

    HOLY CRAP!!! I can keep my house and actually got a GREAT rate to boot!

    I hope everyone stays with it and can keep their homes.

    FYI I was falling behind in my payments more and more over the course of this process. I never got 30 days behind, but I was close.

    Thank you CHASE!!

  3. I am a home owner going through this process as well. It has been almost one month and still nothing. We are are hinest, hard working business owners and because of the economy, stand to lose it all. We are almost 7 months behind, waiting on an answer. Our bills are affordable, but when this crash came, we lost control of our finances. Pray that our lender will be kind and allow us to also keep our home.

  4. I just finished my modification with Washington Mutual and I’m a success story. I followed the same steps listed above . It all happened pretty fast for me. 3 weeks was all it took from start to finish.

    I wasn’t late or behind on my mortgage. I didnt have to pay anything extra. It was pretty painless and actually much easier than when I financed the loan in the first place!

    I was at a 8.5% adjustable but that was ready to adjust in a month to add $1200 to my monthly payment!

    If anyone is like me and has even the slightest worries about what exactly to do and needs a bit of hand holding, I’d recommend http://www.LoanModAssistant.com as it’s a DIY system. Only cost me $199 too. The best part was that hardship letter the other folks here refer to. Mine was tailored to my situation and I just had to tweak it a bit.

    Anyway, I hope this helps someone. God bless.

  5. Earlier this June, my wife and I started looking at modifying our adjustable mortgage with Bank of America. Several calls lead to B of A eventually saying they would “remedy our situation”. The ending result was terrible. I was asked to fax in documents at their request, to which they would later claim that “nothing ever came in”. The customer service representatives were also very rude, as they tend to hang up whenever talks went south. So, then I came across Modify It 4 Less, which provided me with software and services that allowed me to have full control of the entire loan modifying process. The fee to use the software was reasonable and involve no attorney intervention whatsoever. Their customer service was respectable and top-notched, and three weeks later I got a modification! They literally saved my home! Check them out, maybe they can help you with your needs.

    http://www.modifyit4less.com/default.asp?subID=3

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