You happen to be one among millions of anxious homeowners who have faced a similar situation.
There is a definite solution to your problem in the form of the Loan Modification Process.
The ensuing paragraphs will alleviate your worries in this regard.
A loan modification could be defined as an alteration in one or more than one conditions in the original home loan agreement of a borrower, so that the borrower is in a position to afford their loan repayments.
With a reduced monthly installment amount, the borrower will easily be able to meet their financial obligation.
As per the recent plan, the federal government has allocated $75 billion in the form of subsidy to lending institutions so that they may offer mortgage modifications to their home loan borrowers.
Also, the lending institutions have been directed to waive incidental charges and penalties while extending loan modification.
The Process: In order to qualify for a loan modification, your lending bank will assess your capacity to adhere to the terms of the new modified loan.
You will need to show proof of your monthly income and a recent and accurate statement showing your income and expenditure, which will confirm that you will be able to meet the modified loan repayments every month.
Your current financial position should also adequately reveal that you are not in a position to meet the higher installments of the earlier mortgage loan.
While applying for a mortgage modification, you are also required to bring forth a letter of hardship, which clearly indicates the circumstances which led to your present situation.
The reasons could be unique in each case, such as, severe pay cuts, death of a member of the family, serious illness, divorce, demise of co-borrower, or any other unforeseen expenditure, etc.
A moving and convincing letter of hardship from you is very vital in order to have your mortgage modification application approved by the lending authority.
You may represent your loan modification case if you can (do it yourself loan modification), or else you may approach a professional who will guide you and help you prepare all the necessary documents by charging a nominal fee for the services rendered.
The aforementioned tips on the Loan Modification Process should be able to help you if you are one of the many borrowers who are in need of modifying a mortgage loan.