Tips for Getting a Modification to Your Mortgage Loan

With the number of people who lose their homes to foreclosure each year, it might seem like an impossible task to get a modification to your mortgage loan.

However, it is possible, and doing so could help you avoid turning to bankruptcy for relief, or can help you keep your home in a Chapter 7 or Chapter 13 bankruptcy.

The following are a few tips to help you secure a mortgage loan modification:

Collect all your documentation: If you want your application for a loan modification to be reviewed anytime soon, you must have all key documentation ready for review. This includes paycheck stubs, an income and expense budget, a letter detailing the financial hardships you are facing and any other documents your lender requests.

Make sure all documentation is clearly labeled: Your loan servicer likely receives thousands of documents each week, and so your papers could easily get mixed up if not properly labeled and organized. Use paperclips and file folders, and clearly label each document at the very top of the sheet to prevent any confusion.

Don’t be afraid to ask questions: You should be completely confident in what you need to provide to your loan servicer. If not, ask questions. The last thing you want is an avoidable misunderstanding completely derail your case or cause delays in processing your loan modification.

Follow up regularly: Call the loan servicer about once a week to check on the status of your request. You may ask if your file is complete or if the servicer needs any additional information or explanations to put your documents into context. This also can keep your application at the forefront of your servicer’s mind.

Don’t give up: It is easy (and understandable) to become frustrated if you get asked to resubmit documents, especially if weeks have already passed since you first submitted them. Ultimately, you are at the mercy of the loan servicer’s schedule and capabilities. If you can stay patient and quickly provide your loan servicer with the requested documents whenever they’re asked of you, you’re more likely to achieve a positive outcome.

Be as flexible as possible: Loan modifications come in many different forms. Not everyone, for example, will qualify for the federal Home Affordable Modification Program (HAMP), but there are plenty of other opportunities to modify your mortgage. Each method might look different depending on the circumstances of your case.

Provide tax information: You must sign IRS Form 4506-T during the mortgage loan modification process. This allows the servicer to access your federal tax returns. One of the top reasons why modification applications fail is because the homeowner cannot provide clear proof of income. Allowing your loan servicer to review your tax information helps to avoid this roadblock.

For more information on the best strategies for securing a modification to your mortgage loan, meet with an experienced Denver bankruptcy lawyer at Long & Long, P.C.