How to Understand and Maneuver Through the Loan Modification Process and Save Your Home



The most important thing to understand is that the loan modification process doesn't happen overnight. It's a timely process that requires patience and diligence. Because it does take a considerable amount of time, though, it's very important that homeowners begin the process as soon as possible.

The major steps in a loan modification include: 
1. Contacting your lender. Contact your lender as soon as possible to advise them that you are interested in applying for a loan modification and receive the necessary requirements and guidelines for the application.

The following steps are required to determine your eligibility 
2. Modified Payment Calculation. Based on your current income and debt-to-income ratio, your lender will recalculate your monthly payment based on the percentages in the loan modification guidelines. The new payment must be affordable for the homeowner based on his or her income, and it must be less than the current monthly mortgage payment in order for the homeowner to be eligible for a loan modification.

3. Submitting documentation. There are various programs available; each one requires that borrowers submit proper documentation before they will be considered. Failure to produce one document or to confirm that your lender has received required documentation is reason for denial. Your lender will require current proof of income, as well as a list of all current debts and expenses. You will also be expected to provide tax and insurance documentation, which will then be added to your revised monthly payment. Submit all document required, in duplicate if necessary, and confirm receipt and that the documentation is accepted and on file.

4. Based on the documentation received and the calculations based on the loan modification guidelines, the lender will determine if you are eligible, and if so, will re-amortize your loan based on a reduced interest rate and possibly extended terms. If you are not eligible, it's critical that you find out the precise reasons why you were denied so you can immediately rectify those issues and reapply based on the new information.

This is just an overview of the loan modification process, which can at times be complex and difficult to understand. Homeowners who pursue a loan modification need to become educated about the process and learn who to contact and the right questions to ask in order to satisfactorily apply. It will take patience and diligence, and each step is crucial. Many homeowners have saved their home through loan modification. It's also true that many who have been initially denied were later approved through their diligence in providing acceptable documentation and/or correcting any errors or miscalculations.

Unfortunately, though, many at-risk homeowners don't know they have an option to modify their loan, and those who do are reluctant or hesitant because the process is foreign and unfamiliar. Homeowners who are uncertain about the requirements or need assistance maneuvering through the process should seek assistance from a housing counselor or other reputable advocate.


Anna Cuevas 
Consumer Advocate/ Expert Trainer for Mindset & Empowerment to Successfully Modify Mortgages & SAVE Homes/Loan Mod Guru.

Proven Record of Achievement: Modified over 110 loans including Sale Reversals. Real Expert advice from someone who has actually personally modified loans with just about every lender. Insider tips and knowledge. My expertise can empower others during the housing crisis w/insider tips, process, & knowledge. Extremely Resourceful. Trustworthy. Excels in meeting objectives using independent action, prioritization & leadership. Confident & poised interactions w/individuals at all levels. Self-motivated. Dedicated, Expert Reputation of Going Above & Beyond whats required. High standards. Achieves results in all life issues.

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