How To Get A Successful Mortgage Loan Modification?

Mortgage loan modificationThose homeowners who cannot afford their mortgage they can get help and better deal from their lender. But the process to get better deal from the lender is much complicated and inconvenient. As well as, concessions in this process in only provided to those borrowers who earn neither too much and nor too little income to qualify for the lender’s guidelines. Those borrowers who can pay they should pay timely accurately, but if they cannot afford to pay, then the modification programs need to sure that they are able and eligible to make the new payments and they would pay back the loan.

To get a mortgage loan modifications look like an adventure which can only be achieved by a traditional or unreal hero. Basically the loan modification is a permanent process of mortgage restructuring where the loan of one or more than one borrower is change to provide them with an affordable payment. With the process of a mortgage loan modification the lender should agree to either reduce the borrower’s monthly payment or to reduce the interest rate. The mortgage loan modification is mostly the last and best hope for the millions of Americans who are in the danger of losing their homes through foreclosure. Preparation and execution of the application process have an effective impact on the successful completion of mortgage loan modification so it should be inaccurate and right way. Basically the Loan Modifications are the changes in the borrower’s loan agreement. By adopting this process payments become more affordable and borrowers are not default on their loan. Banks prefer to offer the loan modification programs because these are much easier and cheaper to work.  Banks have many options to offer the loan modification including;

  • They attempt to recover the foreclosure property and home.
  • They try to collect and hire somebody through a wage garnishment or a bank to recover the property and save it from foreclosure.
  • Banks give hope to the borrowers and accept the loss.

In the process of mortgage loan modification borrowers are preferred to contact with their loan servicer to discuss their financial situations. Borrowers need to be patient and persistent because sometimes servicers become overcome with customer inquiries.

Requirements of borrowers for mortgage loan modification:-Requirments for mortgage application

For the successful mortgage loan modification borrowers have to missed a mortgage payment or he should be at the forthcoming default risk and it should be because of the increasing payments, expenses of house, income reduction or any other type of hardship which makes the payment unaffordable. According to Fannie Mae and Freddie Mac guidelines those borrowers whose mortgage is at the risk of foreclosure are eligible for the mortgage loan modification. As well as according to their guidelines those borrowers are also eligible who are facing bankruptcy. But with all this borrowers should be aware of their income and expenses and they must provide an evidence of their hardship to change their financial situation. In addition, borrower would sign an agreement of loan modification, hardship letter and other necessary documents. The misrepresentation of borrower’s qualification is federal crime.

Requirements of property for mortgage loan modification:-

  • For the mortgage loan modification property should be a separate home, double, triple or four-unit residential home. According to Fannie Mae and Freddie Mac guidelines cooperative and manufactured property and houses are also eligible for loan modification.
  • The property should be occupied by the homeowner.
  • Vacant and rental homes are not eligible.

For a successful mortgage loan modification following steps should be followed;

  • Homeowners have to fully complete the package of loan modification. They have to submit the payback receipts, a hardship letter and other necessary documents demanded by the loan servicer. The package will drop and file will be rejected if even one document is missing or outdated.
  • Necessary questions should be asked form the servicers. Borrowers should know exactly what they have to provide to the loan servicers. Often servicers asked two payback receipts in the start because two months receipts show the one month income. But those homeowners who pay monthly or weekly they have to submit fewer documents than others. Documents should be clear and accurate because misunderstandings can lead towards the problems.
  • Homeowners should be in touch with the loan servicers and they should call the loan servicers weekly and should check their status. Ask them for the completion of file and documents should be reviewed. A counselor can help the borrowers but as well as lenders should also hear from the owners for their changed or special circumstances.
  • When homeowners are asked to resubmit their documents they naturally feel disappointed. But at that time homeowners should be patient and persistent at their process to get back to the good financial position.
  • Homeowners should be determining on their plan by making payments timely which can protect their credit score. Optional expenses should be cut off from the budget so that payments could be timely.