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How to do a Loan Modification | Applying for a Loan Modification

With the difficult economy and housing prices way down, many people ask me “how to do a loan modification?” or ask about applying for a loan modification. It’s not an easy question to answer quickly.  How to do a Loan modification, as many people would have you believe, is not a matter of simply filling out some forms and faxing them in, it can be a long frustrating drawn out process.

Step 1 in How to do a Loan Modification: Initial Requirements and Lender Guidelines

The first step in how to do a loan modification, is to contact the bank or lender and request their “guidelines” or a list of requirements for the loan mod process. Lender guidelines and requirements can also often be found online. Every bank or lender has a list of information and documents they need when applying for a loan modification. A few universal documents lenders ask for include: tax returns, bank statements, paystubs or proof of income, and a letter of hardship. In addition, lenders have forms or financial worksheets for homeowners to fill out.

Step 2 in How to do a Loan Modification: Get the Lender a Complete File

With these requirements (described above), it is likely that things will get lost or the bank doesn’t process all the documents. When applying for loan modification, it is essential to follow up with the bank representative and ensure they have all the documents and information they need. The most critical item is “proof of income,” or paystubs. The bank must be persuaded that you now have sufficient income to make a regular monthly mortgage payment going forward.

Step 3 in How to do a Loan Modification: Keep Calling and Calling…

It sounds perfectly reasonable when applying for loan modification, that once the bank verifies they have a complete file for loan modification, it is acceptable to simply wait to hear from them. That’s is not the case. It is essential to follow up often, everyday if possible, by calling them (and waiting on hold to speak to someone) to make re-verify your documents haven’t been misfiled, disregarded, lost or that the file has not been closed. It is actually common for the lender to lose your file at least once or twice during the process, so be prepared to have your patience tested, and re-fax everything.

California Loan Modification Lawyers

McFarlin LLP attorneys handle all aspects of loan modification for borrowers in San Francisco, Riverside, Long Beach, Modesto, Sacramento, Oakland and throughout California. Our attorneys are available to provide you with honest reliable advice at our Irvine office or over the phone. When applying for loan modification, it is a very good idea to consider hiring a qualified loan modification lawyer to represent you and protect your interests. Call us today at (888) 728-0044.