Click for Additional Information: Loan Modification Q&A

A Loan Modification is a negotiation between a lender and borrower that restructures the loan terms to fit the current financial situation of the borrower without refinancing. This is a good solution for those who cannot refinance, are behind on payments, struggling to make payments, are experiencing genuine hardship AND still want to stay in their home. A loan modification can be a permanent solution and is not meant to temporarily avoid foreclosure. Due to the troubled market conditions, the government is pushing banks (lenders) to do everything they can to work out a payment plan feasible for borrowers to pay back. The Home Affordable Refinance Program (HARP) is designed to assist homeowners in refinancing their mortgage even if they owe more than the home’s current value. Contact us today for qualifications and guidelines for this program.

In the past homeowners were only allowed a loan modification if they were in default, or if their lender had stated a foreclosure process. Now homeowners can receive a loan modification before they go into default or a foreclosure process has stated. Here are some things to consider and actions you can take to start a loan modification.

Do you need professional help?
Before starting a loan modification ask yourself whether or not you have the time or the energy to battle your bank (lender) on your own. If not you can always hire an attorney or a loan modification-firm. Here at AF2D we offer FREE loan modification assistance.

Be Honest
During the application process you will need to gather all of your financial information and it has to be as accurate as possible to ensure that the loan will be processed as quickly as possible. You would need to gather the following information for the loan modification.
Your monthly gross income, including recent pay stubs/documentation of recent income.
Information about your savings, stocks, bonds or other assets.
Information regarding your mortgage and if applicable, your second mortgage.
Information about any home-equity line of credit on your home.
Account balances on monthly payments including but not limited to: credit cards, student loans, or car loans.
A letter of hardship explaining what caused your increased financial stress, such as job loss or hospitalization. When writing a letter of hardship make sure that you explain in detail why you can no longer make your monthly mortgage.

Get the right people on the phone
Make sure that when you call your bank (lender) you are speaking with loss mitigation, not the collections department. If you are not sure which department you are speaking with, ask them and if they are the wrong department ask them how you contact the one.

Be realistic
Once you present your case to your bank (lender) you have little influence over their final judgment. They base their decision on numbers not emotion.

Patience is a necessity
You must be diligent and persistent through the entire process. It is your responsibility to stay on top of them and make sure they take the time to work through the loan modification process with you.

Leave a paper trail
Document everything! Keep a log of every time you speak with the bank (lender). You need to write down the time, date, and name of the person you are speaking with, as well as the employee number. Also write down what was said.