Do I Meet The Requirements For A Loan Modification

By Author: Donald Morris
Total Articles: 3764
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In many instances a customer is set up on a repayment plan prior to implementing a loan modification which allows a servicer to monitor the fiscal condition of a customer during the repayment plan period to be sure the customer will be able to make payments to the lender. There are significant documents required that are reviewed by a servicer

Hardship Letter:
To meet the criteria for a loan modification customer must have a valid hardship. The hardship must be known and given as many details as possible to sustain your case. A is very subjective and pretty much a requirement in the course of getting a loan modification. There are a few adversities that are considered charitable and do not qualify quitting employment or reducing the number of hours worked are typically unacceptable. The adversities are known and if there is an additional default the customer can not use the same reason for default otherwise their previous adversities was really not over and in many instances the customer is denied a loan modification.

Financial Statement:
This is used to determine the customer ability to pay. This ...
... is usually the first form looked over by the lenders negotiator. This form must clearly indicate monthly salary and operating cost as well as current assets and liabilities. This is what makes and breaks the entire loan modification review. This form also shows whether or not the customer will be able to make payments if the loan is modified. There must be a extra salary at the end of the loan modification or else the plan will be denied. The plan must be affordable. If a customer is severely over-leveraged with debt there is little chance that a loan modification will cure the delinquency. Monthly operating cost are reviewed to determine what bills are necessary and what are unnecessary. Necessary operating cost are meals, utilities and gas and an example of unnecessary are entertainment operating cost, expensive phone plans and unsecured debt. Household operating cost loan payments, utilities, and taxes take up most of the monthly budget. Do not make fixed costs look unreasonable will be a red flag to get further detail. The negotiators will always look for assets that can be liquidated.

Proof of Income:
The proof of salary is usually a paycheck stub, a P&L Profit and Loss Report if self employed, or checking account account showing paycheck deposits. The proof of salary is required to prove the customer has steady salary. The customer must also give frequency of salary. The proof of salary must correspond with the salary shown on the financial account. Resolve any discrepancies