Friday, April 17, 2009

Home Loan Modification - 5 Steps To Navigate Through The Mortgage Modification Process

It is an unfortunate truth that many people are facing foreclosure. While some may see no options available, a home loan modification is a very real possibility for many. This process is designed to change some of the terms in your home loan contract in order to reduce the monthly mortgage payment. If this process is done properly it can help people who have been unable to make their monthly mortgage payments obtain a new payment that fits within their budget. These changes are possible because the bank does not want to deal with a foreclosure. If the homeowner defaults on the mortgage, the bank stands to lose money in the process.

Here are 5 steps that lead you through the mortgage modification process:

1. Discovery. Understand the basic process involved with a home loan modification. Although the process seems difficult to many people, learning a little about the process lets a homeowner determine whether modifying their home loan is right for their situation. Understanding the process is valuable whether you handle the process yourself or hire a third party.

2. Decision. If a mortgage modification is something you want to pursue, decide whether you are going to do it yourself or hire someone to help. If you do it yourself, continue learning about the process and consider a book or other resource to better understand how to work with your lender. If you decide to hire a company or attorney to help with the process, find a reputable person or company and ask plenty of questions to be sure they are the right "fit" for your situation.

3. Letter. An important document for anyone interested in a loan modification is a hardship letter. This letter is typically required by all lenders. The letter should describe your financial hardship and why you need a change in the terms of your mortgage. If you are using a company or attorney, they can help you with this letter. If you are handling the procedure yourself, find a good resource that explains how to write this letter.

4. Communication. Stay in contact with your lender (if you are handling the home loan modification yourself) or with the company/attorney you hired for assistance. Be sure you understand what documents are needed and provide them in a timely manner. Also, communicate regularly and be certain that you understand the next step in the process and what your task is for that step.

5. Patience. The process can be frustrating and time consuming. Be patient and realize that lenders are handling many home loan modification requests, with new requests arriving daily. Be polite, even if the process seems to be moving slowly.

Following these steps will likely improve the overall process and increase your chances of receiving your desired mortgage modification.

By: Mark Winfield

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