In this economy, loan modification is that the only answer of bankruptcy or foreclosure for several homeowners. However, it’s not a simple process by any stretch of the imagination. Despite the existence of several federal programs designed to help streamline the loan modification process, it is often very difficult to deal with the eligibility requirements of both these federal programs and of banks granting the modification.
There are two main categories of eligibility requirement:
- Financial Hardship
- Whether You’re Current on Loans
The hardship eligibility requirement is probably the foremost difficult one for several homeowners to know . In a difficult economy, we are all feeling hardship, and if you lived just within your means only five years ago, the rising price of gas and food may have led to a feeling that your mortgage payment is just too high. This does not qualify as financial hardship to banks or to most federal programs.
When it comes to proving financial hardship, you have to show that you are making significantly less money now than you were when you initially signed up for the mortgage or you have to show proof of medical bills or other sudden necessary expenses. Generally speaking, this is the only way you can be eligible for a significant loan modification.
Current Payment On Loans
This eligibility requirement may seem counter-intuitive. If you’re having a difficult time together with your mortgage, wouldn’t that mean that you simply haven’t paid your loans on time? Unfortunately, this signifies that you simply might not even be trustworthy enough to be eligible for a loan modification in the least . The bank might want to chop its losses and foreclose on your house rather than modify your loans. Therefore, if you think that that there’s any chance that you simply won’t be ready to pay your mortgage, you ought to contact your mortgage lender immediately. Don’t let it get out of hand because you’re afraid of what they’ll say!
Of course, if you are unsure about whether you are eligible for a loan modification but are going through some difficult times getting your mortgage paid off, the very first thing you should do is contact a loan modification lawyer. A lawyer will go through your paperwork with you and help you determine if you should approach your bank about a loan modification or if you should take another course of action.