The first thing you need to know about doing your loan modification is that there is no system or exact science. Every lender is different and a loan mod is not for everyone. I know of a couple that had over 100k in medical bills all in collection or Judgment status and the medical care is ongoing. In this case they were advised them to see an attorney because they needed more than a loan mod and there are other options. This is why if you are going to hire someone make sure they work with an attorney. There are good reputable companies out there. I have heard of some lenders taking less than a week to do a loan mod and some taking up to 4-6 months. When you first contact your lender it is best to have all of your documentation together. There is a list of docs need listed on my blog page. Some lenders will have their own for you. I suggest you have it all ready to fax unless they tell you it needs to be on their form.

The first step is to contact your lender. This will take patience. One thing to remember is that the person on the other end is just like you. Do not be intimidated. Stay friendly but stern and know what you want. Unfortunately most lenders will require you are behind on your payments in order to work with you. Once you get someone on the phone you will ask for loss mitigation department. You will be transferred several times and sometimes get an answering machine or hung up on accidentally. This will take lots of patience. Be persistent as this is what a loan mod expert does or hires someone to do. Also make sure whoever is calling for you is on the loan or they won’t talk to them without written permission. Once you get the right person you will know because they will ask you to send over your documentation either by email or fax.

Next Step: Filling out your paperwork. When filling out the Hardship Letter make sure it's not something like "I can't afford this house". It needs to be a tear jerker. Leave out any sarcasm or blaming and express your accountability to the situation. Lenders don't want to hear that they are at fault for putting you in a bad loan. In my situation I had to put my son in a rehab program for teens which cost me over 60k. I also work in the mortgage business and my income dropped significantly. Those two combined were enough. Some people have lost their jobs and got lower paying ones, some have medical emergencies, you get the point. When filling out the financial statement make it look like you’re not going to be completely broke after the loan mod. The lender won’t be motivated to do it if they think you can't make the payment. This is where a good loan mod company is worth their money. Again don't just hire one because they are the cheapest. I have seen people pay and never get results. I visit a lot of mod companies because they are my past client, loan officers.

Last step is to fax all your information in to the lender and wait. It is important that on your initial contact to get names and extensions every time you call. When you fax over your paperwork follow up with a phone call to make sure they got it. Ask who to follow up with and how long it will take. Make sure to mark your calendar and call back on the dates they give you. This will take a lot of commitment & hard work but could save you a lot of money.

When your loan mod is complete you should receive an offer from your lender. I suggest you look it over carefully and make sure it isn't something that will bite you in the future. Such as an adjustable down the road or just putting your past due payments on the end of the loan etc. If it isn't something you want to do then let them know, counter. Don't be bullied into something that isn't going to work for you. Sometimes this takes going back and forth several times.

In summary make sure to keep a file with all your paperwork accumulated and a communication log. This is your HOME we are talking about. If you decide to hire someone send me an email and I will get you a list of reputable people. I do not do loan mods myself but I did do my own and I did my own short sale on one of my rental homes.

Frank