Loan Agreements: How To Modify Them When You're In A Pickle

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Loan Agreements: How To Modify Them When You're In A Pickle

18 September 2015
 Categories: , Blog

With the amount of debt that is circling the United States, it is no wonder that many households are finding it more and more difficult to keep up with their loan payments. If you've found yourself in a pickle and can't afford your loans, you may want to consider requesting a loan modification. There are many loan modification programs available to help those in need, such as the Home Affordable Modification Program (HAMP), which was designed to help eligible homeowners lower their monthly mortgage payment to just over 30 percent of their monthly income before taxes. While that sounds great, hoe exactly do you get the job done? Here's a brief overview of some steps you should take:

Create a Financial Plan.

Before you can speak to anyone about a loan modification, you must first take a close look at your financials to determine what it is that you can truly afford. Lay everything out on the line and determine what must be paid and what expenses you can eliminate because they're not needed. Create a proposal that includes the amount you feel that you can comfortably pay on a monthly basis and for how long. When you actually put the request in for the modification, you'll need this.

Give Your Lender a Call.

Once you've created a sound financial plan, call your lender. Inform them that you would like a loan modification. All lenders will have their own processes for accepting and processing requests for loan modifications, so it is important that you get this information from them. You ultimately need to know the potential programs that you may qualify for, what documents are needed and what applications are required to be filled out.

Get All of Your Documentation Together and File Your Application.

Make sure that you have every single piece of documentation that your lender needs to process your loan modification request. Otherwise, the process will be delayed unnecessarily, which is the last thing that you need or want right now. Make sure that you label each document clearly and that you have taken your time in writing everything out (ensure everything is legible).

Don't Hesitate to Be Persistent.

Once you've submitted the documentation and application, don't wait around for a phone call or letter in the mail. In fact, give your lender enough time to have received the documentation and give them a call to confirm receipt. Take this time to ask if there is anything else that they need. Then, don't hesitate to continue calling back for updates on your case status. Just keep in mind that loan modifications do not occur overnight, so it may time some time for your lender to process everything. However, you can ask them for a timeframe so that you have a rough idea of when things will be completed.

Contact a Lawyer.

If you want to make sure that you have all of your ducks in a row, you may want to consider speaking to an experienced attorney in foreclosure, real estate or bankruptcy to help you through this complex and tedious process. After all, there is no reason to have to do it alone, and a lawyer like Michael Adler on your side could potentially speed things up.