Understanding the Loan Modification Process
If you’re struggling to make your mortgage payments and you want to save your home from foreclosure then a loan modification is your best chance for a fresh start.
Q: What is Loan Modification?
A: For struggling homeowners who are behind on their mort¬gage, or are having trouble making mortgage payments, there is a program that can prevent foreclosure and make a fresh start: Loan Modification. A Loan Modification is a perma¬nent change in one or more of the terms of a mortgagor’s loan, which allows the loan to be reinstated, and results in a payment the mortgagor can afford. Simply put, if you’re a homeowner who has experienced a financial hardship Loan Modification is a way of resetting the clock on your mortgage to you catch up.
Q: What is a financial hardship and how do we document it?
A: The homeowner must be able to identify and document the hardship that caused you to fall behind on the mortgage. For example, unemployment, unexpected medical bills, or fam¬ily emergencies are hardships that jeopardize your mortgage payments. If you can document these hardships with paystubs, bills, unemployment benefits paperwork, etc. you may be eli¬gible for a loan modification.
Q: What kinds of information will I need to submit?
A: » A hardship letter to explain the circumstances that are causing you to fall behind.
» The last two years of income tax returns
» A list of your expenses and compare those to your income to identify whether you have sufficient income to support your mortgage.
» Depending on your situation, there may be additional information or documents required to complete the ap¬plication. Your housing counselor will let you know what those documents are.
Q: What else will my housing counselor help with?
A: Your housing counselor may recommend a loan modifica¬tion through a reduction in your mortgage interest rate on your mortgage, or an extension of the terms – whatever means to make your mortgage affordable. They will also help you package your documents, and submit them to your mortgage servicer for consideration.
Q: What happens when my loan modification is approved?
A: When your mortgage company approves your application, you will receive a written modification agreement outlining the new mortgage rate, payment amount, terms, etc. At this point, all you need to do is close the deal. You’ll sign the documents (usually with a notary) and return the forms (and sometimes the first payment under the new terms) to the lender.
Q: I’m interested. How do I get started?
A: Call the hotline at the Bridge Street Development Corpo¬ration at 718.636.7596 ext 14. You’ll be assigned a counselor who will help you figure out your situation, your options and your next steps – free of charge.
The process of applying for a loan modification can seem just as involved as when you first purchased your home. But if you’re struggling to make payments and you want to save your home from foreclosure then a loan modification is your best chance for a fresh start.
Let us help you save your home -- Call today!
718.636.7596 ext 14