Loan Modification is the process of modifying one or more of the terms
of your existing loan to make your payments more affordable.
The purpose of a loan modification is to provide you with a
mortgage payment that you can afford.
Loan modifications stop foreclosure proceedings and instead reinstate
the loans as they are being modified.
Lenders are actually in favor of working with you and authorized
representative in order to negotiate equitable loan modifications
because all or portion of the outstanding principal and interest, past
due escrow, late fees, and even costs may be rolled into the loan
modification and thus will not be lost revenue to the lender and since
they are spread over a long period of time, they do not pose a problem
to the borrower.
Also, loan modification avoids foreclosure and even though banks routinely
foreclose on properties and sell the homes, the slowing housing market
has made it difficult for banks to sell such properties. In short,
lenders are in the business of lending money not selling homes.
A modified loan protects the credit rating of a borrower and it also
helps lenders in showing less defaulting loans in their portfolio.
This of course makes a good impression when the financial institution
is wooing potential investors.
What we need from you to start the
Letter - Indicate changes in your financial situation that resulted in
delinquency, include any supporting documents if possible. While we
will be happy to provide guidance if needed, the short and
straightforward letter must be in your own words.
statement for your current loan.
Statements for the last two months.
list of all your monthly expenses.
stubs for the last two months; if Self-employed - 1040s for the last
Returns and W2s for the last two years.
Agreement, if the loan modification is for a rental property.