The loan modification form, if filled out correctly and honestly, should expedite the salvage of the primary residence. No other form that will be dealt with this year will carry as much weight in importance as the one that is laying face down on the table right now. No matter how thick the file is, no matter how many documents or sheets of text it has in it that form alone dictates whether or not the home is retained or goes back to the bank.

Big secret number one, the bank does not want the house back. The bank is in the business of selling homes and financing mortgages. It is not in the home procurement game. The lenders want to make money off of the mortgage they finance through interest and principal. When the collateral for the loan has to be returned, the bank takes a loss from this onset. Using this information to the advantage of the homeowner, the negotiations may begin. Preparation of the loan modification forms is the primary key for success with the lender. The bank does not want to give tips and how to do’s, because this will tip the odds into the favor of the homeowner, they can’t have that. Even though it behooves the bank to negotiate with the homeowner in the retaining of the home, for some unknown reason, banks are unwilling or unable to offer tips and suggestions. It makes no sense.

There are some helpful tips that the homeowner can utilize with regards to filling the forms out for the home mortgage refinancing option. When the completion of the loan modification forms has been set, the one goal that must be remembered is that the form is the tool that assists the homeowner in convincing the bank that they remain a good candidate for the loan workout. This all means that the homeowner must prove to the bank, in black and white, on the home loan modification forms that not only does the homeowner meet all the approved requirements but deserves a second chance. Loan modifications are not mandatory but your bank or lender will be more likely to help out if it feels like it is not being taken advantage of.

The first thing the homeowner needs to do is to know what they are asking for as a new target monthly mortgage payment. The mortgage payment that is being requested from the lender will be referred to as the new monthly payment. It makes perfect sense. Nobody knows better than the homeowner who is upside down or underwater on their mortgage now, what strip price that is, can be afforded in the present or near future. So, with this said, detailed information and honest information concerning income and fences, needs to be demonstrated to the bank. The loan modification form has spots for this information and in essence, is the main reason why there are loan modification forms to begin with. There are steps to determine the target payment however. They are very basic and not very complicated once the homeowner understands how to calculate the debt ratio and then follows the steps and directions to arrive at the ideal payment that meets their budget and relinquishes all concerns from the lender.

There are many books and how to guides in PDF form and in hard cover, that can be researched and discovered online. One important thing to remember when filling out the loan modification form is to know beforehand the bank guidelines for approval. Tweaking the application while remaining honest and within credit worthy guidelines, is a good tactic for gaining approval of the new loan. All steps that meet an ends to that goal, should be evaluated. Be proactive, be early and most definitely, be on time with every meeting with the home lender. The loan modification form is a great initial first step that must be done in order for a successful new mortgage payment.

(Example Harship Letter)

To Whom It May Concern:

I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.

The main reason that caused us to be late is (insert reason here and don’t be too lengthy and long winded) Soon after being late and our income not being nearly enough, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to (lender). It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help.

Our situation has got better because (reason here) and we feel that a loan modification would benefit us both. We would appreciate if you can work with us to lower or delinquent amount owed and or payment so we can keep our home and also afford to make amends with your firm.

We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.

Sincerely and Respectfully,

Mr. & Mrs. ___________________
Signature_____________________
Loan # ______________________
Address______________________
Phone________________________

Hardship Letter Contributed by a Forum Member
September 7, 2007
To: Countrywide Mortgage account # 058989482

Re: Mortgage modification program

Due to the recent adjustment to the mortgage I currently have with your company, I am finding it very difficult to afford the new payment. I have a 3 year fixed rate which is now adjustable and is schedule to adjust again in Feb. 2008.

Considering my current income, there will be no way I can afford the increased payments come February. Hopefully there is way to renegotiate the terms of my current mortgage to avoid default or foreclosure on my home.

Is it possible to have my current adjustable rate mortgage converted to a fixed rate? If this is not possible can the next rate change be postponed to a future date to allow me to hopefully refinance. Any other solutions you could provide would be greatly appreciated.

I have had no problem making my payments for over three years now and do not want that to change. My mortgage was originally written by another company and bought by Countrywide. The original mortgage terms are terrible but it was the only loan I was qualified for at the time. I was assured that refinancing would be no problem but that turned out not to be true due to the downturn of the housing industry.

The main problem is that my property is now worth about 5-10% less than what I paid for it which is preventing me from being able to refinance. I was researching on the internet and came across the Fannie Mae Announcement #06-18 (Oct. 4th 2006) regarding the servicing of Conventional Mortgage Modifications.

I believe this addresses the situation I currently find myself in along with many other homeowners. Attached are recent pay stubs showing my current income.

thanks you for your time and consideration.

By: Moe Bedard

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Moe Bedard is one of the country’s leading experts on homeowner loss mitigation, loan modifications, foreclosure prevention services, mortgage law, predatory lending and issues dealing with the mortgage and housing crisis. Please visit his consumer advocate and homeowner education websites @ www.LoanSafe.org – Protecting America’s Homeowners – Stop Foreclosure www.LoanWorkout.org – Loan Modification and Loss Mitigation News www.PredatoryLendingLaw.org – Predatory Lending & Mortgage Law Moe’s Contact Info: Direct 951-271-6283 Fax 800-734-8819 Email Moe@LoanSafe.org