A Timeline & Tips For A Loan Modification
The modification process can be a frustrating experience for homeowners. While it sometimes takes a few months, it can take over a year or two for some people. You may be asked to send the same documents in on numerous occasions. You may be told things by service representatives that are either totally incorrect or that will be contradicted sometime later.
A loan modification is something that you can do on your own but always remember there are housing counselors with local non-profits that provide assistance for free. In the last few months this process has improved and we do see loan modifications being offered in a more timely manner with some banks.
The loan modification process basically entails gathering all the necessary documents, completing the appropriate applications and financial worksheets and submitting a package with all the supporting documentation to the bank/servicer. Additionally, it requires that you to constantly stay in contact with the bank to make sure your file is being reviewed and that the bank does not require any additional documentation. Keep your paystubs and bank statements every month because the bank will request updated copies. Documents generally go stale within 60 days and since the process takes so long they will require updated financial documents at least a few times.
Here are a few rules and tips that years of
experience have proven to make the experience much easier and that can reduce many of the unnecessary road blocks:
- Fax Payoff and Reinstatement Letter (asking for these numbers) to bank if you need to know how much you owe or have an issue in how much the bank is claiming you owe or in the application of your mortgage payments
- Develop a detailed family budget and access your financial situation regarding mortgage and monthly budget
- Complete the Bank Application
- Be detailed and complete everything thoroughly . Most applications are denied due to incompleteness and missing documents
- Submit all the supporting documentation at once with the Loan Modification Application
- Call the bank after you send in anything to confirm receipt
- Call the bank every two weeks to ask status and if any additional documentation is required
- If the servicer asks for additional documents provide them quickly and follow instructions
- Keep a log of every time you call the bank with a summary of your conversations
- Keep fax confirmation reports
- Have updated documents ready to go because they will need them every two months
The Loan Modification To Go Toolkit will guide you step by step through the process of obtaining a successful loan modification. Learn more about our guide and take the first step to saving your home.