Introduction
Some homeowners may not understand what a home loan modification is. It is simply when a borrower, who is facing financial hardship, gets together with the lender in order to change the terms of the mortgage. This is done to help the homeowner keep their home, usually the home loan modification will lower payments, or spread out the loan for an additional amount of time which makes monthly payments more affordable. While a home loan modification may sound simple enough on paper, it is often a long and drawn out process that can and often does take many months. However, if is worth all of the work if an agreement can be reached that pleases both the homeowner and the lender.
History
A home loan modification will require a lot of back and forth between the borrower and the lender. Paperwork is an important part of the process. You will have to provide the mortgage company with pay stubs, tax returns, a profit and loss statement and a hardship letter. In the letter, you will have to inform the lender of your situation, explaining why you are having difficulties meeting your payments. The profit and loss statement just explains how much money you take in and how much money you pay out. This enables the lender to see that you can pay future payments on time.
Features
During the time that you are working on your home loan modification, you will still be sent mail informing you of the lenders intentions to foreclose. You will also find that your home is listed in the foreclosure notices in the newspaper. This of course is only if you are behind on your mortgage payments. Though most who attempt to get a home loan modification are behind. As long as you are still negotiating with the lender, the foreclosure will not take place on that date. However, a few months later, you may find your home listed again. This is just how the process works. It can be very stressful and frustrating. It is often a case of one department handling certain aspects, while another deals with something else and the two not coming together.
Another thing to expect when working toward a home loan modification is that paperwork will be lost and asked for again. While some may sail through with no issues, it is not uncommon for paperwork to have to be resubmitted. In some cases paperwork is sent and resent several times. This may not happen in every case but it is good to be prepared. This is a complicated process.
Tips and comments
Stay in touch with your lender throughout the home loan modification process. Call to find out how things are going and ask about any progress that is being made.
Send in any paperwork and documents asked for immediately.
Begin working with your lender as soon as you know that you are having a problem. The longer you put things off, the more difficult it becomes. It may seem easier to ignore the problem when you are feeling hopeless, however, your best course of action is to be proactive in working to save your home.
