Banks lose money when their customers are unable to make payments. Therefore, they are often willing to work with homeowners to ensure that payments keep coming in. If you are struggling to keep up with your mortgage payments, it may be in your best interest to consider getting a loan modification. It is a great way to lower your payments and avoid foreclosure.
A loan modification is a permanent change of the terms of your mortgage. It allows your loan to be reinstated and will result in a more affordable payment plan. The bank will not, however, automatically offer you a loan modification. You will have to prove that you need a loan modification.
In order to have your loan modified, you will have to prove that you are experiencing financial hardship. First, you will have to write a hardship letter explaining the circumstances that have affected your finances. Write down if you lost your job, if you have recently incurred unexpected medical bills, or if there was a recent family emergency that has jeopardized your mortgage payments.
In addition to the hardship letter, you bank may request two years of income tax returns and a list of your expenses. They will look at how much you make and how much you spend to determine if you are truly experiencing hardship or if you are just trying to pay them less money. If approved, you will receive a modification agreement that outlines your new mortgage rate and payment amount. All you have to do from there is sign the documents with the help of a notary and return the forms to your lender.
The loan modification process can feel as complicated and stressful as the first time you purchased a home. The stress, however, is worth it if it means you get to keep your home. Make sure you consider all of your options before missing a payment, having your home foreclosed, or putting your home up for short sale. An experienced Orange County loan modification lawyer will be able to help you understand the process and avoid the pitfalls.
In the event that you are experienced serious difficulties in your modification process, attorney Timothy McFarlin can help craft a successful case that ends your financial harmed through successful modification.