Obama's Loan Modification Relief Plan

Loan modification is an easy process, only if you try to get some things right. Many people are denied loan modification facilities, and you might be next. You need to get many things right so that your loan modification is approved.

As noted the Home Affordable Program will be accessible to 4 to 5 million homeowners with a strong payment history on the current mortgages which Freddie Mac owns. Borrowers might not able to refinance because the value of their homes have dropped and this has pushed their loan-to-value ratios to more than 80%.

Financial hardship letter

Lenders will ask you to submit a financial hardship letter. This letter will contain the reasons for home loan modification. You should also state your personal problems, which have resulted in your financial troubles. Loss of a job, an unexpected divorce etc can be mentioned in this letter. Dates clashing with your inability to repay your monthly mortgage payments are to be mentioned in the financial hardship letter. You are advised to keep accurate time lines, which enables the bank to understand the problems, and help you in a much better way. This way you can ask for lower monthly payments. You can mention that you have taken up another job to meet your financial requirements. Inclusion of these points makes the letter more acceptable to the lender, and gives the lender a good idea of the current situation you are experiencing.

Personal budget worksheet

A personal budget worksheet gives the lender a picture of your debt-to-income ratios. This worksheet will be used to decide your new monthly payments. Lenders don't want to give you a loan that you will be unable to repay, or a loan that is unprofitable to them. Be honest when you fill the worksheet. If you state that your debt is high, this might be taken negatively by a lender. The lender will assume that you cannot support your monthly payments. Fill the worksheet, make your budget plan and submit it to the lender on time. Give the lender enough time to review your application. These loan modification programs will increase your chances of availing a loan modification.

Application and paperwork

You have to fill the basic application form, if you want to apply for a loan. You should meet all your deadlines since your lenders will have very little time to analyze your documents.