Tips for Qualifying for Loan Modification Programs

The loan that you initially qualify for may work for you at the time of qualification. Unfortunately, life tends to change, and when it changes, you may find yourself unprepared. Fortunately, numerous programs exist to help people qualify for loan modifications. The Ocwen Loan Servicing, for instance, reports that they have helped more than 100,000 people with mortgages since 2010. Here are some tips for getting involved in one of these programs.

Keep Up With Payments or Seek Help

It can feel like the pressures of your bills and payments are really starting to choke you off. The most common response is to simply avoid the problem and let the bills slide to the back burner. Bank Rate reports that a third of families will file for bankruptcy and then find themselves in a worse situation on down the line, often due to repeating bad financial decisions. Ignoring pending payments and late notices is one of the worst decisions you can make, and a fast route to bankruptcy. If you wait until your payments are in default and you are at risk for foreclosure, you will not qualify for most loan modification programs.

Remember that your payments on your house aren’t the only payments you need to keep up on. If you have car payments due, you should make them. Any defaults or repossessions or bankruptcy filings can reduce your qualifications. The Independent Financial Web reports that the long term effects of a default action on a house or general consumer loan is not as long lasting and serious as a default on a federal student loan. However, it will heavily impact your financial recovery options for the next seven to ten years. As soon as you start falling behind payments and know that things will not be improved within the next billing cycle, you should seek out a loan modification. You can either contact the institution holding your loan or seek out an independent service. Ideally, you should research both to see which one will be best for you.

Be Thorough

Obviously, time is of the essence, but that time crunch means it’s even more important that you follow through on all the necessary steps. These loan modifications, sometimes classified as hardship affidavits, can be dozens of pages long. They require updated financial information on you and your spouse as well as other personal data like your children. It might seem intrusive, but it’s essential for finding the best fit for your situation. Double check your paperwork before you submit it. Errors will have to be corrected before the request can be processed. Do not send it in without the required documentation either.

As a general rule, your applications will be processed faster if you send them through fax or email. You can call the loan modification service to see if they have specific addresses for financial hardship cases. If not, send it to the primary financial office with the header “ATTN: Financial Hardship Application [Full Name]” or something similar.

Qualifying for a loan modification program generally comes down to keeping up with your other required payments and not waiting too long. You need to make sure that once you start getting into financial trouble that you seek out assistance. And when you do, you must be thorough in your documentation. Send your application and documentation through email or fax for the fastest processing.

If you have made some financial missteps, consider talking with an attorney at Van Horn Law Group to guide you out of the mess. Get your free consultation now.