One of your first choices when you are struggling to make your mortgages payments is to apply for a loan modification. There will be qualifications to the loan modifications and they vary from bank to bank, investor to investor and every single situation is different from the next. The main thing to remember is to not think that your loan modification process and qualifications are the same as someone else you know or have heard about.
It seems these days that being a realtor has become more than helping people buy and sell homes, we seem to get involved in trying to help them save their homes. Many people do not know who else to turn to which is why I am writing this article as a realtor in the market today.
Know that in order to qualify for a loan modification, something in your income versus your debt has to have changed since you originally got the loan on your home. In most cases this will mean that maybe you had a job change and now earn less than you did before. Maybe you have major unexpected medical bills or a divorce and loss of income. Whatever the reason there has to be some reason that you can no longer make the payments that you have been making but can afford a modified amount. Basically, you can make a large portion of the payments and maybe need a few hundred shaved off of the payments. You still have to be able to prove that you can make these modified payments so be prepared to collect a lot of documentation to submit to the bank such as bank statements, pay stubs and tax returns.
Many people are now believing that loan modifications never happen. From my experience I am finding out that to date more are denied or go so long that the person applying for the modification ends up in foreclosure and very few actually get their loan modified.
With all of the current investigating that we hear is going on I should hope that more and more homeowners are going to be successful in getting a loan modification.
Most importantly, stay on top of the process, get paperwork in as soon as you are asked and keep track of your current foreclosure date so that you do not get to a point where it can not be stopped.
If you honestly do not need a loan modification do not miss your payments in an attempt to get one, you will get penalties and additional costs in order to catch up with your payments as well as your credit will be hit in a negative way.
By John Hester