What Information Will I Have to Provide to My Lender When Applying for a Loan Modification?

Mortgage Modification Documentation

Each lender has its own list of documentation that must be submitted when applying for a loan modification. You may be asked to submit:

  • Copies of the original loan documentation
  • Current mortgage information
  • Details about your property, including whether it’s your primary residence, the current property value (including documentation substantiating the current value, such as a recent assessment or sales listings of comparable properties) and whether the property is currently for sale
  • Information substantiating your current income (such as recent tax returns or paycheck stubs) and asset information (such as bank and brokerage statements)
  • Information about any financial hardship you are currently suffering
  • Information about your fixed monthly expenses and other details that affect your ability to repay the loan

This information is used to determine whether you are eligible for a mortgage modification. According to the U.S. Department of Housing & Urban Development:

“Lenders are to use specific financial analysis criteria when determining a Borrower’s eligibility for the Loan Modification Option:

1) The Borrower’s surplus income is a minimum of the greater of $300 and 15% of net monthly income,

2) 85% of the Borrower’s surplus income is insufficient to cure arrearages within 6 months, and

3) The Borrower’s monthly PITI [principal, interest, taxes and insurance] mortgage payment can be reduced by the greater of 10% of the original monthly mortgage payment amount and $100, as a result of the Lender setting the interest rate at the Market Rate and amortizing the new loan over 30 years.”