Global Grind’s financial coach and author of Yes, You’re Approved: The Real Deal About Getting a Mortgage and Buying a Home, Lynn Richardson, tells you the truth about the mortgage modification process:
Even in the midst of the current foreclosure crisis, with faith, knowledge and persistence, you may be able to save your home. If you are upside down on your mortgage, facing the inability to pay your mortgage, expecting an interest rate increase, or already in foreclosure, there may be help for you. No matter how hard it seems and no matter how many times you may have received inconsistent information, continue to communicate with your lender, as there are instances where new programs are have been made available after the borrower’s initial communication. Here are a few things that EVERY HOMEOWNER should know about the mortgage modification / lender communication process -- first, you must get your paperwork together:
1. Write your hardship letter. It should be clear and honest with details about your past financial situation, what lead to the current situation, and how you may be able to pay a reduced/modified payment in the future if you are given a fresh start.
2. List all of your monthly expenses and be prepared to provide copies if necessary. You will need to record each and every expense, for example: phone, internet, cable, electricity, gas, water/garbage, security system, carnote, credit card bills, loan payments, childcare, tuition, lunch money for school, books and fees for school, clothing, gas, life insurance, car insurance, spending money, tithes, groceries, public transportation / parking, etc. Keep this list handy so you can refer back to it and/or adjust numbers and decrease expenses if necessary. Have this information ready when you call so you will have accurate information. Please be reminded that if you want to have your mortgage payment lowered, you must be willing to make some sacrifices. It will be difficult to get a mortgage modification if you have excessive luxury expenses.
3. Provide copies of ALL information requested by your lender, for example: paystubs, bankstatments with all pages, tax returns, etc. Even one missing document could delay your modification. Write your loan number on each and every page and keep copies of everything you mail.
4. Provide a Market Analysis on the residence to assist your lender in establishing the new value of your home. This is optional, as many lenders will have their own valuation process in place. Real estate agents can do this for free for you if you provide the address of the property, number of bedrooms, number of bathrooms, type of house, garage car count, basement finished or unfinished, approximate square footage.