Global Grind’s financial coach, Lynn Richardson, provides homeowners with these tips to assist in the mortgage modification process as the Occupy the Dream movement calls for an immediate end to foreclosure action from the nation’s banks:
Even in the midst of the current foreclosure crisis, with faith, knowledge and persistence, you may be able to save your home. 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:
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 your monthly expenses and be prepared to provide proof (click here to practice on this Income & Expense Worksheet). Have this information ready when you call so you will have accurate information. 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 of the information requested by your lender (paystubs, bankstatements, etc.). If just one document is missing, it will delay your modification. Write your name and loan number on each and every page. Follow up every week and be prepared to send the paperwork again if you have to.
4. Get a spiral notebook and record everything everyone tells you about your mortgage during this process. Keep dates, times, etc. Call your lender and get the name, employee id, phone, fax and email of the person you speak to. You may not be able to get the phone number, because they are often working in call centers, but ask anyway.
5. Ask your lender what type of loan you have: FHA, VA, or Conventional and ask your lender who is the investor on your loan. It can be the lender, Freddie Mac, Fannie Mae, Ginnie Mae, or another private investor. This is important because ultimately, it will probably be your investor who gets to make the decision on your loan modification.
6. Ask your lender what are the steps to consider each of the following: loan modification, interest rate reduction, principal reduction, loan workout plan, deferment of payments, and/or forbearance. If you are NOT behind on your mortgage, ask about a streamline refinance (in most cases, a streamline refinance requires no credit check, no documentation of income, and no documentation of assets). Also, ask the lender if there is any program available that you have not requested.
Understand that this process may take several months or even several years, but the key is this: do not stop communicating. Call your lender weekly or even a couple of times per week. Verify and re-verify the information your receive by calling back and speaking to another representative. As the representative to repeat what information they have written in your notes before you hang up the phone and feel free to tell them what to add, delete, or modify. Yes, with faith, persistence and knowledge, you may be able to modify your mortgage and continue to Occupy Your Home.