5 keys to modification success

When pursuing a loan modification, there are several key elements that must be there to be successful. Every lender has a different list of things they require, and while they are widely varied, there are a few that are always in the mix. While this is in no way a complete list of items you will need, it is a good start, and knowing this list can help you to be successful. Here are the top 5 things you will need.

1: Demonstrate the Need. In order to qualify for a modification, no matter who your lender is, you will have to show them that you need one. You must, in detail, describe the event or series of events that led to your delinquency (or probable delinquency if you are current on payments).

2: Express Your Desire. You must let the lender know that you want to stay in your home, and that you want to get your rate lowered so that you can afford to continue making the payments. This sounds pretty obvious, but in a time when a large percentage of homeowners are choosing to just ‘walk away’, expressing a desire to meet your obligations is crucial to getting a modification.

3: List Your Expenses. You need to sit down and figure out exactly what your monthly obligations actually are. Include everything you spend money on every month, from the mortgage, to what you spend on dog food, to maintenance on your car(s). Only by having the full picture can you figure out exactly what you need, so be thorough.

4: Prove Your Income. You will need to have a few things available to do this, including paystubs, tax returns, and bank statements. Have them ready, and don’t guess on the numbers. When obtaining these documents, a good rule of thumb is to get 2 months of paystubs and bank statements, and your last 2 years tax returns. Every single lender out there will ask for these, so having them ready will save you time.

5: Take the Time. Modifying your loan is a lengthy process, and if you cut corners, or fail to provide accurate documents, that time frame will grow exponentially. You will get placed at the bottom of the stack, while people who have provided everything the lender has requested will be modified ahead of you, regardless of your need. Make sure your information is up to date, and be prepared to spend a lot of time on the phone, weather you’re speaking with the lender, or just on hold.

When you break the process down to it’s key elements, getting a loan modification is not terribly difficult or confusing, but it is time consuming and frustrating, and all the more so if you skip steps or fail to produce required documents. In the end, the more you gather ahead of time, the less painful the process will become.