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  • The final stage of a loan modification rescue is the three-month trial period.

    The final stage of a loan modification rescue is the three-month trial period.

    In this series of articles we have analyzed in detail the procedure you must follow to qualify for a loan modification. We have used Chase’s Loan Modification Program, but the same principle applies for Bank of America’s Loan Modification Program, CitiBank’s Loan Modification Program, Wells Fargo Loan Modification or any other of loan modification programs sponsored by lenders.

    As we discussed previously the first step is to call or visit your lender and explain your situation. You will need to provide your personal details and some documentation to back your claim. Then you will need to fill in a Homeowners Information Package, which will require more detailed information about your income, expenses, tax records and mortgage status. Once you file all that documentation your bank will review your case and decide if you qualify for a loan modification. If you pass the review, you still must pass a three month trial review before your loan modification is final.

    Trial Period Plan

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    If you pass your lender’s loan eligibility review, you will be sent a loan modification agreement to sign. This agreement will describe the new terms of your mortgage, your new mortgage payments amounts and the starting date of your trial period. This three-month trial plan is designed to check if you can afford the loan modification. Understand that making your payments during this period is essential. It proves the loan modification is viable and works within your budget.

    Final Modification Program

    If you faithfully pay your mortgage during your three-month trial and the documents you filed with your lender are validated by your lender’s specialists your loan modification will be permanent. In this case your lender will send you a Final Modification Agreement. Read it carefully, make sure the new mortgage payments match the terms you agreed with your lender, sign it and send it back to your servicer. Your servicer will review the final agreement. If you pass this review, the loan modification will be final as long as you continue making your payments.

    As you probably gathered navigating your way though a loan modification is not easy. It requires patience, hard work and endurance to jump through all the hoops required by lenders. However, even with the best intentions you might not qualify for a loan modification. In that case, there are still other alternatives for homeowners at risk of foreclosure. These include desperate measures such as short sales and deed in lieu of foreclosure agreements. However, the truth is that foreclosure is a real risk for millions of American, and even with the best intentions, not everybody will qualify for a loan modification.

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