Documentation, Requirements and Tips for Foreclosure Alternative Options
Calling the Bank
determine if you may qualify for any of the described foreclosure
alternatives, please contact your bank and ask for the loan mitigation department. Be prepared to provide the following
information verbally when you call:
- Reasons for hardship/inability to make your monthly mortgage payments
The following are some of what banks are looking for, and must be circumstances beyond your control. Your bank should have a place on their site with a hardship letter outline so that you include all the information they are looking for.
- A change in family size since getting the loan
- A change in jobs or income
- Any health factors affecting your ability to perform normal duties
- Deployment or change of location by the military
- Death in the family
- Rent reduction from tenant (if investment property) due to their hardships
- Children or Spouse serious health issues
- ANYTHING beyond your control that causes an increase in expenses.
- A detailed overview of your current financial situation is looked at by banks to determine if they DID grant a loan modification, would you be able to afford the new payments. Items they will need include;
- Current monthly income
- Current balance of all liquid assets including
checking, savings, mutual funds, 401K, etc.
- Current monthly payments for all outstanding
- Information on any subordinate lien holders for your
Paperwork and 'In Writing'
When you are trying for a loan modification, it is IMPERATIVE to complete the ENTIRE application and include EVERYTHING they ask for, and be ACCURATE, or you WILL be denied! After the phone conversation, you will need to start gathering all the required information and write a comprehensive hardship letter. Search online for SEVERAL sources to help you to create the best and most effective letter to increase your chances of successfully doing a loan modification. You will need a full budget and show all assets and liabilities/ and income and expenses, and be as thorough as possible.