Tag Archives: loan modification
How To Get A Loan Modification In A Week Or Less
If you want to get your loan modification approved in a week or less, good luck! It is almost impossible…or is it?
If you know anything about loan modifications, you know that it generally takes 2 to 3 months to get the modification approved. It is a stressful process if you are the homeowner desperately waiting for an answer. Some lucky people can get this done in about a month, but this is very rare. Getting it done in a week or less is almost unheard of!
The reason it takes so long to get a loan modified is because there are so many people in need of this service. Lenders have stacks and stacks of files on their desks and not enough employees. It takes a long time to sort through all those files and get the loan mod completed.
There are a few companies out there that have such close relationships with lenders that they will actually allow them to take some of the unbearable workload off their backs. There are only a few companies that do this because it is very hard to come up with the necessary ratios to get this accomplished.
What this means in lamens terms is this: A company that provides this service can call up your lender with your loan number. They speak to a case manager and review your file. They approve or deny the loan modification right away and tell them what your interest rate and payment will be. They can then tell you what the terms of your modification will be and you can decide to move forward or pursue another option.
If you do decide to move forward, they can generally complete the loan modification within 24 hours to 7 days. To further ease your financial burden, often times they can push back your next payment 30 days from the date the loan mod docs are signed.
The success of this depends on what lender you have and if you are even a candidate for a loan modification. The top lenders participating in this program are Countrywide, Bank of America and EMC. These are not the only lenders, just the main ones.
If you want to get your loan modification approved in less than a week, this might be your only option.
Example of a Hardship Letter for a Mortgage Loan Modification
A basic loan modification requirement is to demonstrate to your lending institution that you are faced with a financial hardship situation. You need to present enough evidence to convince your lender that, due to your current circumstances, you need to negotiate a lower monthly payment with them.
Some mortgage holders find the process of composing this letter somewhat intimidating. However, bear in mind that lenders are highly motivated right now to approve borrowers under the new Obama guidelines. A hardship letter is your opportunity to let your bank know what has happened since they originated your mortgage, and why you must get a modification on your current terms. Below is a letter that will give you a starting point for composing one of your own.
Date.
Lending institution name and address.
Your name, your address, and your loan number.
Dear [blank]:
This letter is to explain to you, my current financial circumstances, and to request a loan modification from your institution, so that I may stay in my home. My family and I do not want to lose our home, and we are willing to work with you to do whatever it takes to stay here.
We became delinquent on our mortgage payment, due to my husband’s job layoff. He was employed for five years, but then he was out of work for four months. During those four months, we needed to spend our savings to buy groceries and pay our basic bills, to make ends meet, we cut back on our expenses by any means possible. Now however, we have depleted our savings and must use credit cards simply to pay for living expenses, and to keep up with other bills.
The good news is that recently my husband started a new job. While his pay is less than what he earned before, we have adjusted our budget, as necessary. With a modified monthly mortgage payment, we will be able to afford to stay in our home. As you may know, due to declining property values all around, our houses value has declined so much that selling or refinancing is not a possibility. Renegotiating our loan with you is our only option.
In light of our family’s circumstances, please consider as for President Obama’s home affordable plan, or whatever other program we might qualify for through your bank. We are hard-working, responsible homeowners, simply trying to keep our family’s home. Please review our enclosed application, and consider us for a rate reduction to 2%, with 40 year terms. Thank you very much for your consideration, and we are most eagerly awaiting your response.
Respectfully,
[Your name].
Of course, you will need to use this letter as a template. Personalize it as necessary, describing your own particular circumstances. The main points are to be descriptive, yet three, providing a few details to try to gain your lender’s sympathy. Also, you will be required to demonstrate your ability to meet the new modified payment terms of the loan. This means that you’ll need to submit to your lender a budget detailing your expenses and income. Show your lender in black and white terms that you we’ll be able to afford the renegotiated terms of your current agreement with them. A budget that includes a small provision for emergencies each month will lend credibility to your application.
Once you understand how to write an effective loan modification hardship letter, you stand a good chance of qualifying for a home loan modification that allows you to stay in your home. You’ll need to complete a financial statement, so begin by assembling any necessary documentation for this. Wait to contact your lender until you have all your paperwork together. By being thoroughly prepared, you stand the best possible chance of saving your home, under this once-in-a-lifetime plan.