Loan Modification Help

Published: 20th February 2009
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So, you're all ready to submit your loan modification application to your lender to get the loan workout you need to stay in your home. There is a lot riding on this-are you sure you have completed all of your paperwork properly so that it has the best chance of approval? The truth is that more homeowners are declined than are approved-make sure you will not give your lender a reason to decline your loan modification. Here are 3 reasons your bank could turn you down-make sure you know how to prepare your paperwork so you give your lender a reason to approve you-not decline you.

Loan Modification Decline Reason #1: You have not proven an acceptable financial hardship-this is one of the basics for determining a qualified candidate for a loan workout. Your bank must verify that your circumstances have changed since you first got the loan, and so you can no longer afford the monthly payment that you originally agreed to. Loss of job or income, illness or medical expenses, divorce-separation, military service, interest rate re-set are all some valid hardship situations. Loss of home equity alone is not. You must provide your bank with a compelling and convincing Hardship Letter that contains 3 important elements-do you know what they are?

Loan Modification Decline Reason #2: You have not convincingly proven that you will be able to afford to pay and maintain the new modified loan payment and will not be a risk for re-default. The #1 thing your lender is concerned with is that you can afford to stay in your home even after the loan workout is granted. There is a high rate of borrowers defaulting again after their loan modification-you have to prove that this will not happen to you.

Loan Modification Decline Reason #3: You have not met your lenders guidelines for approval regarding debt to income ratio and disposable income. Each lender has their own criteria to determine an acceptable modified mortgage payment-your proposed payment must meet this criteria and your loan modification application paperwork must prove in black and white that you can meet those guidelines. Do you know how to demonstrate clearly to your bank that you do meet their criteria for approval?

This is important stuff-make sure that you do not give your lender a reason to deny your loan modification application. Your goal is to give your bank all the reasons they should approve your loan workout-and you can do this clearly and decisively when you know your banks guidelines for approval and then prepare your paperwork so that it has the best chance of meeting those guidelines. This is too important to leave to chance-research, learn and prepare so you can submit an acceptable loan modification application.

You can get the help you need to prepare your loan modification application by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read handbook that will provide you with everything you need to prepare a professional and acceptable loan modification application that will meet your lenders guidelines for approval. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.
For more information and the best loan modification tips in the world, please visit my Loan Modification

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