Home Loan Modification Approval - The 3 Things You Must Do

Getting approved for a home loan modification can be a confusing process.  Most homeowners won't need to pursue mortgage relief more than once or twice in their lives, and thus few individuals seeking loan modifications are familiar with the steps involved in getting approved.  This is unfamiliar ground for most homeowners.  Loan modification professionals, however, deal with numerous applications every day.  The following tips have been provided by some of these professionals, and if you follow this advice, you'll be five steps ahead of other applicants and that much closer to getting your home loan modification approved.

1. Provide adequate documentation.  This is by far the most common mistake made by homeowners seeking a loan modification.  Every loan modification company requires a unique set of qualifying documents, but there are many similarities across the board.  You'll need to provide proof of income, tax information, and a hardship letter.  Be thorough.  Most importantly, organize your application package and be sure that it's complete before you submit it.  Put a label on each document.  Number the pages if necessary.  Don't use white-out or scribbles to cover mistakes or typos.  If you mess up, print a new sheet and start again.  Some loan modification companies receive over 50,000 sheets of paperwork each day.  Your application needs to be complete and professional.

2. Be open about your financial situation.  This may seem obvious, but it's another word of advice that bears repeating.  Relinquish any financial or tax information your loan modification company requests, within reason.  Often you will only be required to demonstrate one or two months of stable income, but specific circumstances may require additional paperwork or proof of income for a lengthier period past.  According to loan modification professionals, incomplete or insufficient proof of income is one of the biggest reasons homeowners fail to qualify for a mortgage restructure.  If the company you're working with requests additional details, provide them.

3. Be willing to change your expectations.  There are a variety of different home loan modification structures.  You may qualify for one and not another.  What you expected to qualify for may not be what you ultimately get approval for. The federal Home Affordable Modification Program (HAMP), for example, has very strict requirements that cannot be negotiated.  Either you qualify or you don't.  There is no bending of the rules.  An in-house modification package offered by your local mortgage company, however, may be highly customizable.  It's important to stay flexible during the approval process. If you're not willing to accept terms that don't align with your preconceived expectations, you find yourself disqualified.