Mortgage Loan Modification Programs: Tips to Ensure You Qualify

Uwe Schmorl (Betriebsrat bei Q-Cells in Bitterfeld), Moderation: Bola Olalowo (MdA, Bündnis 90/ Die Grünen. Sprecher für Wirtschaftspolitik der Fraktion im Berliner Abgeordnetenhaus), Frederik Moch (Energiereferent beim DGB, Abteilung Industrie-, Dienstleistungs- und Strukturpolitik), Foto: Stephan Röhl

For many small business owners, troubles on the mortgage front can seriously threaten an already precarious business status. A home mortgage that initially seemed a good source of money for the business may result into the need to lay off workers or may even force the business to close. One of the best options that many private mortgage advisors propose for homeowners with troubles making mortgage loan payments is to contact their lenders for mortgage loan modifications. A mortgage loan modification is basically a negotiation agreement between you and your lender on modifying some or all the terms of your mortgage loan.

Getting a mortgage loan modification has been labeled as a quest that only a mythic hero can achieve. However, mortgage experts advice that there are ways that you can use to better your chances. Here are quick tips that you need to keep in mind when looking for a mortgage loan modification:

1. Get A Clear Picture Of Your Finances: You stand a better chance of getting a mortgage loan modification if you can demonstrate your ability to repay and if you have a clear understanding of the various costs and income prospects that you will face going forward.

2. Understand The Fees and Penalties Involved: When negotiating for mortgage loan modification, ensure that you are up to date with any fees and penalties that you might be exposed to. Understand the fees that are in play and whether or not the modification will eliminate, tack, or reduce them on repayment.

3. If your problem in making payment is short term, try to ask your lender about postponement of the payment for at least a limited period of time. Remember, you have to be prepared to demonstrate to the lender that you will be in a position to begin making payments once again.

4. On the other hand, if the problem of making payment is long term, be prepared to make a realistic offer and clearly demonstrate to your lender how you will be able to repay the modified loan. You should also ensure that your lender is up to speed with regards to various incentive programs that may be available to help.

5. In case the lender refuses to modify for you the foreclosure looms, you can consider asking the creditor to at least produce the note, especially if the creditor (other than the initial lender) is seeking foreclosure). Although some private mortgage consultants will tell you that this is a stalling tactic, sometimes it can encourage creditors to negotiate.

6. To learn more on the negotiation tactics for a mortgage loan modification, you can seek for advice from HUD approved foreclosure avoidance experts in your locality. They will advice you on the local, federal, and state programs that can assist you.

7. Complete All The Documentation: You need to submit your paycheck stubs, budget, hardship letter and any other relevant documentation to the relevant loan servicer on time. Remember, if any document is missing or outdated, your mortgage loan modification file might just find itself at the bottom of the file.

8. Stay in Touch With the Relevant Officers: Try to call the servicer at least once or twice a week to check on the status of your request. Ask whether any document is missing and try to explain any special circumstances.

Whether your problem of making mortgage payments is short or long term, the best option that you have (as a home owner) is to contact your lender to try and work a new payment agreement. Although lenders are usually not obliged to make mortgage loan modifications, it is often in their best interest to try and work out viable payment plans for homeowners rather than push for foreclosures.