Despite the fact that the federal home loan modification program has been in place for years there are new homeowners who are finding themselves in a position where financial distress has led to the need for modification efforts in the hopes of avoiding foreclosure on their home. When this occurs, homeowners may be in a position where they are unsure of how the modification process may work, what steps need to be taken, or what resources are available to assist them through this process which can ultimately save their home.
Yet, some of the basic aspects of the modification program need to be understood primarily before homeowners beginning the modification application process, as their are certain homeowners who, in the past, have had a great deal of difficulty when dealing with their servicer and faces an uphill battle when it came to acquiring even a trial modification plan. While some of the information that is available regarding the home loan modification program may be common sense to some, newly distressed homeowners who are unsure of where to begin do have certain resources available to help them not only begin the application for a modification but guide them through the process and even deal with their servicer.
The HOPE Hotline is one of the more common resources that homeowners have as it can connect certain homeowners with free housing counseling assistance and even aid these individuals when they are exploring what particular plans within the modification initiative or state programs may be available and helpful for a homeowner’s situation. Homeowners who are accessing housing counseling assistance need to remember that there are some scams being perpetrated against homeowners in need, so sticking with federally approved or reputable housing counselors will be necessary so that homeowners can avoid further problems with their home.
The other piece of the home loan modification application puzzle comes in the form of documents that must be submitted to a servicer, and this is where homeowners must make sure they have everything they need and, after submitting this paperwork, keep in contact with their servicer during the process. Typically, homeowners must show through documentation what their current household income is, be it for a single homeowner or a married couple, often they will look at what financial obligations a homeowner faces in terms of necessary expenses and obligations, and homeowners have to submit a hardship letter that describes in specific detail how they came into their particular financial hardship, which usually requires that a homeowner provide evidence and dates of when they were unemployed and how much of a decrease in income was seen.
Again, keeping in close contact with a mortgage servicer, consulting housing counseling assistance, and explaining various aspects of a homeowner’s financial situation can be a meticulous task but a necessary one before homeowners may find themselves qualifying for a modification plan. Homeowners have to be very detailed in explaining various sources of income, any activities that may have led to income recently, and obviously showing that a reduction in income has taken place due to no fault of the homeowner are all necessary before a much easier transition through the modification program may be seen. Keep in mind, the modification process can be frustrating and there are some homeowners who have followed the application instructions but are still met with a difficult task. However, homeowners who continue to pursue these foreclosure prevention options can usually find some form of foreclosure prevention aid that will work best for their situation or, if these programs are unhelpful, servicers may now be more willing to work with homeowners to help them transition from their home through the use of short sales and relocation assistance.