- Wells Fargo Refinancing For Existing Customers
- 2015 Government Mortgage Help targets FHA Programs
- How to Find Cheaper Closing Costs on your Mortgage
- Obama Extends the HARP Refinance Program for 2013
- IRS Supplies Guidance on Home loan Modifications
- Indiana State Mortgage Help for Those in Danger of Foreclosure
- Mortgage Assistance Available in Oregon
- Wisconsin Mortgage Assistance Programs
- How to Write the Mortgage Hardship Letter
- CHFA EMAP Program for Homeowners
This series of articles looks at loan modification programs and the steps you must take to qualify. To make this guide more relevant and practical we look at CHASE’s loan modification program as an example.
Any loan modification, whether offered by a lender or sponsored by the government has four main stages:
1.) The initial conversation with a loss mitigation agent.
2.) The eligibility review.
3.) The trial period plan.
4.) The final agreement.
This article will look at stage 1: The Initial Conversation, explain what it entails and provide practical advice on how to present yourself in the most positive light possible.
When you call or visit your bank (CHASE in this example) the agent you speak with will ask for information on your case to assess your situation. This does not mean you need to have all your documentation ready before you talk to your bank, you can prepare that later. However, you will be asked some basic questions in your initial conversation with a loss mitigation agent about your situation, and you will need to be able to answer those questions to get your application moving.
The first question you will be asked is why are you struggling to pay your mortgage. To qualify for a loan modification there must be a specific financial hardship that is undermining your ability to make your mortgage payments. Hardships that can qualify you for a loan modification include medical emergencies, a divorce, loss of employment or a reduced income.
The next question is how far behind you are in your payments. If you are too far behind the bank may decide you are a lost cause and decide investing in your loan is not worth their time. Remember banks offer loan modifications to clients because foreclosure are more expensive than loan modifications. However, clients who apply for a loan modification and end up foreclosing on their mortgage anyway are more expensive than straight foreclosures. Banks therefore try to filter lost cases and focus their attention on borrowers who will be able to remain current on their mortgage with a loan modification. The key is to contact your bank as soon as possible when you face financial difficulties that jeopardize your ability to pay your mortgage. The sooner you talk to your bank the more options you will have.
So what do you need for your initial conversation? Be prepared. Although you don’t need all your documentation, basic information like proof of income, tax records, the reason for your financial hardship and the number of months your mortgage is overdue will help your loan modification application progress faster.
Our next article will look into the second step of your loan modification: The Eligibility Review.
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