Do-it-yourself loan modification – what you need to know

Most lending institutions such as Citigroup, Country Wide and Wells Fargo are now offering their customers the opportunity to save their homes by taking advantage of home loan modification. Mortgage modification is a very effective and realistic solution that can not only help save the homes of thousands of homeowners across the country, but is also a great way to address the subprime crisis and other issues affecting the economy.

Home loan modification programs help homeowners who are unable to make their mortgage payments due to financial difficulties. Foreclosure is certainly not a lucrative option for lenders given that the real estate market has bottomed out and there are simply no buyers in the market. So, the mortgage modification is a more viable solution where both parties can benefit. The bank can get most of their principal back while the borrower gets certain rebates that make mortgage payments more affordable.

When you secure a home loan modification, there are two ways that monthly payments are reduced, either by lowering interest rates or by extending the term.

Contrary to popular belief, you can apply for a home loan modification yourself without having to enlist the help of a company to negotiate on your behalf. However, if you are more than a month behind on your monthly mortgage payments, it would be safer to consult an attorney. But if you aren’t ready, it may be best to start the mortgage modification process on your own. Statistically, you have a better chance of getting a home loan modification if you contact the bank yourself than if you go through a company that offers to negotiate a mortgage modification on your behalf.

The home loan modification process involves a bit of paperwork, so you should be prepared. Some of the documents you will need alongside a Hardship Letter for the Mortgage Modification are:

– Current paycheck.
– Statements for all accounts
– W2 and tax returns
– Borrower application
– Hardship certificate
– And any other relevant documents that will help the bank verify the accuracy of your claims