Mortgage Loan Modification What You Should Know Before Trying To Get One

Getting a mortgage loan modification can be a long and difficult process, but it will be easier if you have some idea of what you are getting into before you start. Here are some tips to help guide you through the process of negotiating a modification for your mortgage loan.

First and foremost, always remember that the loss mitigation worker is working against you. His employer is the bank, and the bank has trained him to try to get you to agree to pay as much as possible. That is why it is 'loss mitigation,' not 'mortgage assistance.' Loss mitigation is the bank's attempt to limit the amount of their losses. They will not give up a cent that they don't think they have to.

Prepare yourself thoroughly before you speak to your lender's loss mitigation department. Arm yourself with copies of all of your bills for the past year, both paid and unpaid. Also have copies of your pay stubs or other proof of income for at least one or two months. You might also be required to produce copies of your tax returns for the past two to three years. If there is a specific hardship that has come up which has impacted your ability to pay, you need to be able to prove it.

Everything the mortgage company mails you needs to be kept in a file. That includes regular statements as well as anything related to the negotiations you are trying to do. Keep even the envelopes. You may need to prove the date something was mailed. Also keep copies of anything you send the bank, and send it certified mail. Record all of your phone calls. Sometimes the lender will try to change the agreement on you, so you need to have proof of everything that has been done.

Save up the money you would normally be paying toward your mortgage payments, even if you don't have enough to pay the full amount. When you are finally able to reach an agreement, the lender may require a lump sum amount to start the loan modification. You could be out of luck if you no longer have the money available.

Most important of all, don't make an agreement that doesn't work for you. The bank will often make you an offer that actually increases your payment amount for a period of time to get you current, and then goes back to the normal payment amount. Unless you have gotten a raise since you started having trouble making ends meet, this is obviously not going to work. Keep at it until you get something that will work for you, and be prepared to walk away if no agreement can be made. Foreclosure is not the end of the world, and you may even find yourself better off if you can get yourself into a cheaper home with management rent or payments.

To make sure your best interest is protected it's a good idea to speak to a qualified loan modification attorney before moving forward.