The Debt Management Expert

Before you get started on the process of attempting to get your loan modified you must first understand that you will need a little patience. The typical time line for a loan modification is between 60 and 90 days.

The second thing you must understand is that you need to be very open in terms of your current financial and personal situation. Not disclosing information to your bank or third party negotiator will only lead to disappointment down the road for your loan modification.

Third, you must collect a number of documents. You should have them ready before you start the process so that the process can be expedited. You will need: Last years taxes, your original loan documentation, recent pay stubs, and recent bank statements. The information you provide for a loan modification is very similar information you provided when you received your loan in the first place.

Forth, you will need to write a hardship letter detailing why the bank should provide you a loan modification. For more information on hardships letters go to: Tips on How to Write a Hardship Letter and Sample Hardship Letter.

Fifth, be clear on what you actually can pay when it comes to your loan modification. Understand what new terms for your loan you can live with. Getting your loan modified but not being able to afford the new terms of the modified loan does not help anyone.

Finally, decide if you want to go it alone on your loan midifcation and negotiate with your bank all by yourself or hire a professional negotiator or attorney who has done a significant number of loan modifications. The banks do not want to end up with your home if they can help it but they will have their own interest at heart rather than yours. If you do decide to go with a third party to help you make sure you check references and make sure that the operation is a legitimate one.

A hardship letter is a letter written to your bank or mortgage company telling them why you can no longer afford to make the payments on your home. This letter describes your hardships and specifically what has happened that caused you to fall behind.

Based on the current credit environment, hardship letters are being used as a tool to help homeowners avoid foreclosure on their homes. The result can be a modification of the loan or the acceptance of a real-estate short sale by the bank.

Some basics to remember in writing your hard ship letter are to:
• Write the letter in your own words with feeling. Also show your appreciation for their time. A real person will be reading this.
• Be specific on your hardship. Good examples of hardships would be: A significant cut in pay or loss of employment, a medical issue that prevents you from working, or becoming a single parent with out child support.
• Provide the reason you fell behind on your monthly payments. Detail each delinquency with specific dates.
• Provide an offer to resolve the debt issue and show a willingness to cooperate in a solution to retain your home.
• Provide documents that show that your are having financial hardship. Examples could be recent late notices on bills, your taxes from the previous year and your bank statements.

For specific examples of a hardship letter you can use click here:  Sample Hardship Letter For Loan Modification