What Documents Are Needed To Obtain A Loan Modification?

Loan modifications are helping millions of homeowners keep their homes and avoid foreclosure

. With a modification, the existing loan is modified by the lender to lower the interest rate and/or to extend the loan term. Sometimes, the principal is reduced. The modification allows the homeowner to make more affordable payments on their monthly mortgage. Since most homeowners are unfamiliar with the loan modification process, many hire an experienced loan modification attorney to assist them with the negotiations and preparation of the loan modification documents required by their lender.

To increase the chances of obtaining a successful and favorable modification, the homeowner should contact their lender as soon as possible when they realize they are in financial trouble. Even if the homeowner is not in default on their mortgage yet, it is important to let the lender know the homeowner's intentions. If you wish to keep your home and obtain a modification, the lender will require the following information be submitted to them for their review and approval:

1. A hardship letter which describes the financial hardship you are experiencing such as a job loss or reduced wages, a divorce, death in the family or other financial hardship.

2. An authorization letter allowing the modification attorney to negotiate the modification on your behalf and to receive information about the loan balance from the lender.

3. Financial statement reflecting your current assets, debts and liabilities.

4. Copies of your income tax statements for the last couple of years.

5. Copies of your last two recent paycheck stubs.

6. Copy of your 1099's or W-2s.

7. Copies of your recent bank statements.

Most lenders have their own modification application that can be accessed online at their website, or they will send you one in the mail. The lender wants to make sure the borrower has sufficient income to make the new loan payments so the borrower must demonstrate that they have a stable income. The loan modification attorney can advise you on how to complete the application and help you gather the required financial information to submit to the lender so that the modification has a higher chance of getting approved. It is important that all the information the lender requests be submitted so that the application is not denied or rejected for missing information. Having proper legal representation also shows the lender that the borrower is serious about obtaining the modification and lenders will take the modification request more serious as well.

An average modification can take a few months so it is important to follow-up with the lender to make sure the process is going smoothly. The attorney can handle this for you making sure that the lender has all the information they need to make a determination. Once the modification has been approved, the attorney will review the loan documents with you before you sign them so you no longer have to worry about losing your home.

by: cdloanmod

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