| The average homeowner stuck in a bad loan and | | | | make sure it was received and has been logged into |
| struggling to make their mortgage payments does not | | | | their system. |
| understand the loan modification process and how the | | | | 4. Then you will be given a short telephone interview |
| Obama federal program could help them. That's too | | | | during which your information will be verified and the |
| bad-because $75 billion dollars has been set aside to | | | | lender will ask you a few questions. Make sure you |
| help those homeowners. Here is some information that | | | | have all of your paperwork in front of you and ready |
| outlines what is involved in applying and qualifying for a | | | | for you to refer to. If you have already figured out |
| loan modification. | | | | what your target payment is and know that your debt |
| The loan modification process is basically a 5 step | | | | ratio is in line-because you worked on your budget |
| procedure that a borrower must navigate successfully | | | | beforehand-you will have a good chance of approval. |
| to get their mortgage modified to a lower terms. | | | | 5. The bank will send you the loan workout proposal |
| | | | and you must sign this with a notary present. Make |
| 1. Contact your lender and tell them you are having | | | | sure you review the agreement carefully and verify |
| trouble making your payment and are facing a financial | | | | that it is what you agreed to.The loan modification |
| hardship situation. They will either refer you to their | | | | process using Obama's federal plan has standard |
| website for the application forms or mail them to you. | | | | approval guidelines and standard terms. If you can |
| CAUTION: do NOT give them any of your financial | | | | prove you meet those approval guidelines, you could |
| information on this first call-you need to have time to | | | | have your interest rate reduced to as low as 2% for |
| learn and prepare before you disclose your income | | | | 40 years. It is worth your time and effort to learn and |
| and debts. | | | | prepare before starting your application process with |
| 2. Now that you have the forms (you can also use | | | | the bank. Just a little bit of your preparation could make |
| generic loan modification forms available in a kit), you | | | | the difference between approval and denial. |
| can begin gathering all of the required documents and | | | | The federal program, called HAMP, has been |
| start working on your budget and proposal. You need | | | | streamlined for 2010 and it is now possible to get your |
| to understand a bit about what the approval guidelines | | | | loan modification in just 30 days from the time you |
| are so that as you prepare your budget, you will be | | | | submit your application. The way to get this quick |
| able to make the necessary adjustments and prove to | | | | response is to send in your accurate and complete |
| the bank that you meet their criteria for approval. This | | | | modification application the first time, and be certain |
| step is critical to success-if you just blindly give your | | | | that your financial statement proves in black and white |
| bank your information you risk being turned down | | | | that you fit into the standard approval formula. This |
| because you did not know you needed to make some | | | | means that your debt ratio and income and expenses |
| minor adjustments. | | | | meet the guidelines. If you are not sure how to figure |
| 3. Fax and mail in your complete loan modification | | | | this out, then you may want to use a software |
| package to your lender. Keep copies of the entire | | | | program designed to help homeowners complete their |
| package for your records. Don't leave anything out or | | | | application correctly. |
| your answer will be delayed. Follow up in 5 days to | | | | |