Applying for a loan modification can be an incredibly frustrating experience. Anyone who hasn’t tried to submit one of these applications to a loan servicer has little idea of how much time and work can go into this process. I certainty didn’t before I began working in this area of law. Here are some tips on applying for a loan modification, which I hope are helpful in completing one of these applications.
- Read the Application Instructions Carefully: Bank and loan servicers will not hesitate to reject an loan modification application if a page is missing or a line item is not correctly filled out. One particular trouble spot is with bank account statements: loan modification applications often require every page of these statements, even if several of these pages are blank. Are some of these requirements overkill? Absolutely. But, failing to follow them will result in denied applications and lost time.
- Show Proof of Income: To show that you can sustain a loan modification, you need to prove that you have income. If you work for someone else or receive benefits (such as Social Security), this can easily be done through your paystubs or bank statements. If you work for yourself, or receive rental income, this gets trickier: the loan sevicer will want to see deposits of this income into a bank account. If you can’t show this, you can’t prove you have this income. Be sure that you can show sufficient proof of your income.
- Show Proof that the Loan Servicer Received Your Application: Loan modification applications and supplemental information for your application should always be sent through some form of certified mail, to show that the recipient got the information. If you are submitting the application by fax, get a confirmation that the fax was sent. Moreover, be sure to follow-up with the loan servicer several days after sending in these documents.
- Be Prepared to Apply More Than Once: The unfortunate reality of applying for a loan modification is that the process can take a while, even if you have been applying for it correctly. Be prepared to apply more than once.
- Create a Log of Your Applications: The single most important one of my tips for applying for a loan modification is to create a paper trail of your applications and communications with the loan servicer. This record will be a tremendous help if you need to take further action later on against the servicer.
If, after several attempts, you have not been successful in getting a review of your loan modification applications, obtain a consultation with a foreclosure defense attorney, who can help you determine the best way to proceed.