Mortgage Loan Modification Guide

If you are struggling to make your mortgage payments, a loan modification may be an appropriate solution. A mortgage loan modification is primarily a private matter between you and your bank – you do not necessarily need the help of an attorney.

Do not ignore mail or phone calls from your lender: If your lender does not hear from you they will be required to initiate foreclosure proceedings.

Contact your lender as soon as possible: If you are having trouble making your payments, contact your lender to discuss your options as early as you can. The longer you wait to call, the fewer options you will have.

Gather relevant documents, including:

• information about the monthly gross (pre-tax) income of your household.
• your most recent income tax return.
• information about your savings and other assets.
• your monthly mortgage statement.
• information about any second mortgage or home equity line of credit on your home.
• account balances and minimum monthly payments due on your credit cards.
• account balances and monthly payments on your other debts and personal loans.
• a completed Hardship Affidavit describing the circumstances responsible for the decrease in your income or the increase in your expenses.

Get Help: Seek foreclosure-avoidance counseling. You can find a listing of government-approved counseling agencies here. These services are provided free of charge. Beware any solicitors charging large up-front fees or guaranteeing you a loan modification or other solution to stop foreclosure.

You can petition for a loan modification without the help of an attorney. However, there are some things that only an attorney can do, like review every loan document for legal violations, or contest mortgage line items that may be unreasonable.

As you weigh your options, consider the following questions:

• What happened to make you miss your mortgage payment(s)?
• Do you have any documents to back up your explanation for falling behind?
• How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent?
• What changes in your situation do you see in the short term, and in the long term?
• What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen?
• Do you want to keep the home?
• What type of payment arrangement would be feasible for you?

During the Foreclosure Prevention Process

• Keep notes of all your communications with the lender, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the lender. Send your letter by certified mail, “return receipt requested,” so you can document what the lender received. Keep copies of your letter and any included documents.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out.

Be Patient: It may take 3-6 months of calls, faxes, emails, letters etc. to get help before you get relief.

Be Persistent: The squeaky wheel gets the grease. Even if your request for a loan modification is turned down, keep trying. State and Federal Governments, as well as Banks, are constantly reevaluating policies and implementing new programs to help homeowners.

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.