Do I meet the requirements for a loan modification

In many instances a mortgagor is set up on a stipulated plan prior to completing a mortgage modification which allows a servicer to monitor the economic condition of a mortgagor during the special forbearance period to be sure the mortgagor will be able to make payments. There are important documents required that are reviewed by a servicer

Hardship Letter:
To meet the requirements for a mortgage modification mortgagor must have a compelling hardship. The hardship must be documented and given as many details as possible to support your case. A is extremely biased and pretty much a requirement in the process of getting a mortgage modification. There are a few hardships that are considered voluntary and do not meet the criteria quitting employment or reducing the total hours worked are typically not accepted. The hardships are documented and if there is an additional default the mortgagor can not use the same reason for default otherwise their previous hardships was really not over and in many instances the mortgagor is not allowed a mortgage modification.

Financial Statement:
This is used to determine the mortgagor ability to pay. This is usually the first document looked over by the lenders mediator. This document must clearly indicate monthly income and expenses as well as current assets and liabilities. This is what makes and breaks the entire mortgage modification review. This document also shows whether or not the mortgagor will be able to make payments if the mortgage is modified. There must be a spare income at the end of the mortgage modification or else the plan will be denied. The plan must be affordable. If a mortgagor is severely over-leveraged with debt there is little chance that a mortgage modification will cure the delinquency. Monthly expenses are reviewed to determine what bills are necessary and what are unnecessary. Necessary expenses are meals, utilities and gas and an example of unnecessary are entertainment expenses, expensive phone plans and unsecured debt. Household expenses mortgage payments, utilities, and taxes take up most of the monthly budget. Do not make operating costs look unreasonable will be a red flag to get further detail. The negotiators will always look for assets that can be liquidated.

Proof of Income:
The proof of income is usually a paycheck stub, a P&L Profit and Loss Statement if self employed, or checking account report showing paycheck deposits. The proof of income is required to prove the mortgagor has steady income. The mortgagor must also give frequency of income. The proof of income must correspond with the income shown on the financial report. Resolve any discrepancies

Donald Morris the author of Stop Foreclosure. There is more information about loss mitigation at Help Stop Foreclosure. Also read our blog about Loan Modification Help

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