Loan Modifications seem to be the last hope for a number of homeowners across America who are struggling with their mortgage payments. This is ever more clear with the rising foreclosures that is expected to reach record numbers in 2010. Lenders such as Bank of America are offering mortgage loan modification for those in danger of falling behind or in danger of being foreclosed upon.
The entire loan modification process is very time consuming and tedious. Especially, if you have a loan with a bank like Bank of America. They are so inundated with loan modification requests that your particular request could easily be overlooked if not prepared properly. That is why it is imperative that you follow these very simple steps in order to ensure that you qualify for a loan modification:
1. Call your bank’s Loss Mitigation Department and inquire about the documents necessary to start the loan modification process. The representative that takes your call may immediately want to go right into discussing your hardship and your finances. Try to avoid discussing this with them as they may want to prequalify you on the spot. Bank of America or some of the other large national banks may simply direct you to their company web site where you may be able to download a loan modification application package.
2. In order for your bank to know that you are seeking a loan modification you will need to prepare a hardship letter. This is important as it explains the hardship that you may be going through or have gone through. You do want to be detailed with your hardship letter but, not too detailed. Here’s why…
3. A financial form must be prepared carefully to show the bank that you are struggling to make your current payments. However, you don’t want to show them that you are too deep in a hole that you can’t even afford a modified payment. Bank of America and any other lending institute will need to see that you are able to manage your budget in a way to show your lender that you will be in good position to pay off your loan once they have approved you for a loan modification.
4. Be as honest as possible without disclosing too much information. Lies can hurt you if you get caught. Your bank will note all conversations and activity into their system. If they see a trail of lies then they will feel that you are not providing any factual information.
5. Make sure all of the necessary paperwork is included in your application upon submission. Bank of America like all other mortgage lenders will have a checklist of all items required. Verifying that all items have been provided will give you a better chance that your application will be processed faster.
6. Create a log and track every single connecting call you make with Bank of America. Document the time and day that you called Bank of America and note the representative’s name and ID number. Do this on a weekly or bi-weekly basis. It is also important to note details of the conversation and any negative experience you may encounter throughout the process. In the event you need to escalate your case with a Bank of America supervisor or manager, you can leverage yourself with any bad experience you have encountered.
Following these steps do not guarantee a modification from Bank of America or any other lender for that matter. But, it will certainly help the bank process your file more efficiently in a timely manner. Call your bank as soon as your mortgage payments become a burden.
Helpful Links:
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MHA Trial Plan Most banks are currently offering loan modifications in one form or another and many are participating in the Government's MHA - Making Home Affordable modification program. Also known as the Obama Plan or the HAMP... -
Obama's Program: Better or Worse? The Obama Program or The Making Homes Affordable (MHA) was introduced by Obama in March 2009. Is this program making things worse? Watch this clip. What do you think? The graph below illustrates how poorly... -
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- Hardship Letter Hardship Letter Guidelines I've read several blogs on the internet on what a hardship letter is and how you should write a hardship letter for a loan modification. A hardship letter for a loan modification...
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- Keeping my change with Bank of America First off, a disclaimer...I dont work for Bank of America. That being said, I think their "Keep the Change" program is an incredible way for the "troubled saver" to actually save some money. I think...
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Thanks everyone for the comments. Homeowners tend to fear calling their bank for good reasons. They could be a bit intimidating as they do want your money. But, no matter who your lender is, you should never fear asking them for help. Most lending institutes today have a department specifically designed to assist struggling homeowners. The steps you have to take when applying for help is actually very easy. You just need to follow the bank’s instructions, no matter how repetitive or tedious it might be. Otherwise, most of the process is simply out of your control. All you really can do is wait.
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