One option for dealing with a mortgage payment that you cannot afford is to apply for a mortgage modification. A mortgage modification, if granted, changes the terms of your mortgage loan – usually permanently, so that the loan itself is more manageable for you. If your mortgage is modified, certain critical terms of your mortgage loan may be changed, such as the interest rate, monthly payment amount and/or the period of time for repayment. If your mortgage is modified, it could mean the difference between saving or losing your home.
To apply for a mortgage modification. Some mortgage lenders require you to be at least three months behind on your mortgage payments. Other lenders do not have that requirement and will review an application for a mortgage modification, no matter what your payment status. You may seek a mortgage modification, even if your lender has already filed a foreclosure complaint against you and even if the foreclosure has been pending for quite some time. You can seek a mortgage modification at any point during the foreclosure proceedings, up until a Sheriff Sale of your property has been conducted.
The process begins with you completing and filing an application for a mortgage modification. Most lenders have similar application procedures and will require you to produce some financial documentation to substantiate your application. Documents such as tax returns, pay stubs and bank records must ordinarily be submitted to your mortgage lender. Frequently, you will be required to submit a letter of hardship, explaining your difficult financial circumstances and why you should be granted a modification. You will also be required to review and sign multiple other documents. Although the process can be time consuming and often frustrating, if granted, a modification of your mortgage may provide you with some much needed financial relief.
If you decide to apply for a loan modification, it is critical that you continuously communicate with your lender. You must call the lender often for updates and to confirm its receipt of your documents. Do not wait for your lender’s representatives to contact you.
Some homeowners apply for mortgage modifications on their own, while others prefer to utilize the services of an attorney. If you choose to apply for a mortgage modification on your own, please be sure to follow the instructions of your mortgage lender carefully and to remain proactive during the entire process.