How hard is it to apply for a loan modification? A lot harder than it should be. Lots of people online share their loan modification stories. Some were their own, while others were their friends. But they all shared a common theme: They all went through a process that is daunting, ambiguous, emotional and sometimes, even humiliating. Humiliating because even after following all the instructions and spending considerable time, effort and money on their applications, many underwater homeowners find themselves in “mortgage limbo,” not knowing whether or not they’ll get to keep the roof over their heads. Here are a set of example of most common challenges.

The Challenges

1: Not knowing whether or not you pre-qualify. Let’s first look at what happens when you want to buy a property. You get in touch with your mortgage broker or bank, and once you answer a set of pre-approval questions and submit the supporting documents, your bank tells you upfront whether you’re pre-approved, how much house you can afford based on your income, what guidelines you should follow, and other useful information. The same, however, is not true when you’re trying to modify your loan. You still have to answer a set of questions to determine whether you meet the minimum eligibility requirements, and you still need to submit the necessary paperwork, but your bank won’t tell you upfront whether or not you actually pre-qualify. Often, they won’t even tell you in a timely manner (in my case, it took seven months before my bank got back to me). I’m not talking about the time it takes to verify your documents-banks and lenders should and will take time to validate what you have declared. But underwater homeowners who are applying for a loan modification shouldn’t be put in a “guessing” position where they have to wait months just to find out whether they’re pre-approved, right?

2: Getting the run-around when you follow-up. When you apply for a new loan or refinance your current one, you’ll typically work with one person and, typically, you’ll be given their full name, email address and telephone number. But that’s not the case when you apply for a loan modification-at least not until you get assigned to a “negotiator” who will mediate between you and the underwriter. Before that happens, you’ll likely spend months dialing 800 numbers and getting re-routed from one department to another, always talking to a different person and having to explain your case each time.

3: Encountering inconsistencies throughout the whole process. If and before you get assigned a “negotiator” to your case, you may get inconsistent and ambiguous answers whenever you call your bank to know the status of your application. Sure, one can say that because loan modification programs are relatively new, it takes time for banks to optimize their operations. But the lack of transparency, clarity and communication still results in a highly frustrating experience for homeowners.

4: Having to prepare a ton of paperwork. While you can look at the government’s Making Home Affordable site and other resources to get a good idea of what documents and forms you’ll need, often, that won’t be enough. Your paperwork and data will be scrutinized-in minute detail-for anything and everything that the underwriter isn’t clear about.

5: What I call, “applying in the dark.” A user wrote me the following: “They said it didn’t look good for a loan mod, but they wouldn’t tell me what their criteria are.” It’s a common story-most homeowners couldn’t get specific information from their bank or lender on what they need to be able to qualify. And that’s really the crucial point, isn’t it? What most, if not all, homeowners want is an honest answer in a timely manner so they could take appropriate action, and if necessary, fixed what needs to be fixed to get their finances-and their lives-in order. But when your bank isn’t giving you feedback regarding your application, even after months of waiting, it’s a one-way street and you’re left “in the dark,” feeling powerless.

So what can you do? There is an online software solution that can help you address the challenges; additionally, it helps you understand your options and negotiate better with your bank or lender.

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