3 Mistakes That Could Cause Your Loan Modification Application To Be Denied
A loan modification could mean the difference between losing your home to foreclosure and you staying in your home and making affordable mortgage payments. If you are applying for a loan modification it is absolutely critical that you avoid the following 3 mistakes or your loan modification application could be denied.
Mistake #1 Not presenting a convincing hardship case to your lender
One of the main things you must demonstrate in order to qualify for a loan modification is you must demonstrate that you are suffering from a financial hardship that makes meeting your monthly mortgage payments virtually impossible. You must describe a legitimate hardship such as loss of a job, divorce, or high medical costs in a compelling and convincing manner in your hardship letter. If you fail to do this, your loan modification request will not be approved.
Mistake #2 Failing to prove that you will be able to make the new monthly payments on time
You must provide clear evidence, supported by a financial statement and documented proof of your monthly income and expenses, that you will be able to make modified monthly payments according to the terms of a modified loan agreement. Lenders are concerned that borrowers that are granted a loan modification will once again go into default because they can’t afford their monthly payments. You must provide proof to your lender that this won’t happen in your situation.
Mistake #3 Submitting an inaccurate or incomplete loan modification application
It is imperative to submit an accurate and complete application. If you don’t tell the truth or omit certain items your loan modification request will most likely be denied. Your lender will be verifying all your income, expenses, assets and liabilities so it is very important that what you report is complete and accurate. If your application is missing information it will be set aside which will cause delays that could dearly cost you.
The bottom line is you must submit a convincing, accurate and complete loan modification application. You need to convince the lender that you are facing a legitimate financial hardship that is making it difficult for you to meet your monthly mortgage payments. You do this by writing a convincing and compelling hardship letter. At the same time you must convince your lender that you will be able to afford modified payments and make them on time. You will demonstrate this through the financial statement and supporting documents that you submit with your loan modification application. Finally, you must submit a complete and accurate application. Otherwise your loan modification request could be delayed or denied.
