With the present economic downturn costing many hard working people their jobs the reality that the housing market crisis could be around for a long time is setting in. Job loss can be the preliminary event in a sequence that leads to foreclosure. Although the conventional belief is that the end result of falling behind on your home loan payments is foreclosure and eviction there are some strategies available to the beleaguered homeowner facing the wrath of their lender? Foreclosure prevention is not a myth, it is tried and tested, and it works.

The reality of foreclosure is that most homeowners unwittingly assist the bank in the foreclosure process. The initial reaction when the bank starts calling is to hide and hope that they go away. The bank won’t go away; money is their business and their only concern. There is nothing personal they don’t hate you they just want to exercise the default option in the mortgage, recoup their funds and get on with their business of lending money to credit worthy borrowers.

The trouble with the banks business plan is that today’s credit worthy borrower is tomorrow’s unemployed defaulter. Very few borrowers enter into a mortgage contract with a lending institution with the intention of going into default and eventual foreclosure, eviction and possible homelessness.

The best advice that can be given to a person who finds themselves in the foreclosure is to consciously take control of their situation. If one decides to let events take their course the foreclosure process will most probably be finalized in as little as 180 days from the initial default. 180 days translates into six months which is not a long time for a family whose bread winner is out of work and whose finances are depleted.

The worst thing to do is nothing. Merely submitting an answer to the banks complaint to the foreclosure court will most probably add another 6 months onto the process. This is valuable extra time for a family trying to prepare for fiscally for the future. Foreclosure prevention translates into holding off the lender for a period of time allowing the homeowner to adequately prepare for the future.

It is true that is a small number of cases the banks so mishandle the foreclosure process that they end up paying large damage awards to the homeowner but in most cases the plan is to delay the process for the maximum amount of time possible to allow the homeowner to move on with their lives in a financially stable way.

Delaying the foreclosure process allows a homeowner time to get a new job which might allow them the possibility of qualifying for a loan modification program which would allow them to prevent the foreclosure and stay in their home long term.

The homeowners who are most successful in fighting foreclosure are surprisingly enough the ones who are willing to fight. Access the situation. Access the options and go for it.

Foreclosure prevention is a very real option for a homeowner who is willing to become involved in the events of their life. A 180 day or 6 month foreclosure timeframe can very easily be drawn out to a 24 month or 2 year. The foreclosure prevention plan allows homeowners the time to rearrange their finances which in turn may allow them to refinance through a loan modification program or to move out in their timeframe with finances for a healthy fiscal future.

Are you stressed by a mortgage payment you can’t afford? Does foreclosure seem like a very real possibility? There is assistance available in the form of reduced payments if you know what to do. We will discuss how you should go about preparing to make a call to your lender for loan modification. Since you can only apply once, you want to do it right the first time!

We will discuss 3 critical steps to approval:

1. Convince your lender that you need and are a worthy recipient of assistance in the form of loan modification. This is done with a hardship letter, which is a concise explanation of your financial hardship. You need to compile an explanation of the causes of your precarious financial situation and inability to pay your mortgage payments. You also need to present the changes you have made in your budget that would allow the responsible payment of a lower payment and your commitment and resolve to do just that. Your goal is to help the lender understand your predicament and want to help you.

2. Prepare your financial statements and budget. To establish your eligibility, your lender will require a detailed worksheet or your monthly financial expenses and income. A major component of this budget preparation is the new monthly payment you are requesting. Do you know how to go about calculating your target payment?

3. Compile the necessary documents that your lender will need to review and validate your application for a loan modification. Be completely sure that you have correctly filled out the forms and attached the correct documentation. Be aware that your application will be one of thousands of others and only the completely correct packages will get quick review and a good opportunity for approval.

Don’t be intimidated by the process; complete each step carefully and you can receive the loan modification help you require from your bank. They will receive financial incentives for each loan modification they complete, so if you meet the eligibility requirements, they are motivated to grant your approval. You need to only take the first step today to be on the way to a new lower monthly payment and staying in your home.

One of the most vital aspects of getting through with your loan modification aspiration is to fill the form correctly. Only when you are able to do so will you get the lender’s approval. In any case, you have to make sure you understand the guidelines under which you have to fill the loan modification forms correctly otherwise there is a danger that you will make an irreparable mistake somewhere. Every lender has a representative to help you in understanding the guidelines of the loan modification forms and you can also ask for their brochures on the same.

Notes on contacting bank for loan modification forms:

It is amazing how different the information you receive can be from person to person when you contact bank employees. This is why it is so important to keep an accurate lender call log sheet to keep track of all bank contact. Speaking with the same few people every time is very important when you contact bank loan modification/loss mitigation departments.

In any case, the following are some of the tips that can help you in making sure that your loan modification forms get your lender’s nod.

1. The first thing you must educate yourself on is what hardships are allowed by the lenders. Make sure that the hardship you have fits the bill. The commonly approved ones are death of an earning member of the family, sudden medical expenses, an operation or an accident, loss of employment, relocation, drafting into the military, imprisonment, divorce, etc. But remember that all lenders may not accept all of these as valid hardships.

2. You will have to attach the letter of hardship along with the bank loan application form. Now, writing the letter of hardship is a different story in itself. There are various templates available on the Internet which you can use to make your own letter, but make sure you do it well. You must seek professional help in writing the letter of Hardship if you are not too sure.

3. You will have to substantiate your hardship by giving all the proof you can. For example, if you have lost your job, you will have to attach the document that proves you are unemployed.

4. Things that must absolutely follow your mortgage modification forms include your credit report, your letter of hardship, proof of your incomes and expenses, your bank records, etc. Do not miss out on any of these; it will only delay the proceedings further. You will also have to give your stubs of payment (the most recent ones are definitely needed), tax return records in case you are self-employed and other such documents.

5. You can expect to get your loan modified to up to 40% of what you are earning as gross income, but no more than that. Even with that, you will have to assure your lender that you will diligently make the payment on the loan with the revised terms.

Mistake #1: Applying with your lender prior to knowing the way the entire system works and being unaware of lenders requirements in order to approve your application.

Mistake #2: Paying huge sums of money as upfront charges to a loan modification company before establishing its credentials and loss mitigation expertise. Many home loan owners have surrendered thousands of dollars without positive returns, instead of starting with their own do it yourself loan modification application process.

Mistake #3: Time is of essence. Do not end up wasting it by speaking to employees who under the pretext of assisting you end up extracting last dimes from your pockets. They actually belong to collections department and will probably never help you in providing an actual loan workout. You need to know the right contact person in order to derive the desired results.

Mistake #4: Unconvincingly written hardship letters will not help your cause. The description should be compelling in order for the lender to empathize with your situation. It is imperative to understand that if you do not convince your bank that you deserve a Loan workout plan due to circumstances which are beyond your personal control, your chances of approval are very minimal.

Mistake #5: Error of Omission – Incomplete information or omitting relevant fields on your application form can be the most common reason for the delay and in some cases even rejection of your proposal. Are you aware that your local bank shall verify all the information provided by you? It is a full disclosure procedure, in which, delays can be avoided by disclosing all your income and debts in totality. There is a method available to ensure that you do not leave or miss anything on your proposal.

Mistake #6: Submitting a Loan Workout proposal which does not meet the criteria or requirements set forth by your lender. Each lender has their own criteria that must be met. When your forms do not conform to set criteria of the banks, then in all probability your proposal will be declined. Ensure that you know your banks lending guidelines and then complete your loan modification forms. Are you aware of method to gauge your target mortgage payment so it is within your budget and also confirming to lenders guidelines for approval?

Mistake #7: Not providing your lender with the entire loan modification package that includes all forms and documents needed for their review. Remember, your lender has thousands of borrowers like you who need similar assistance.

Mistake #8: Not being persistent in communicating with your lender can allow for your case to fall through the cracks and remain un-resolved. You must ensure you are in constant communication with your lender to ensure you get a speedy resolution to your application.

Do know what happens to the package when items are missing or incomplete and cannot be further processed? It is brushed aside and relegated to the bottom of the pile which effectively barriers your chance for a possible loan workout program.

Success of do it yourself loan modification depends on you avoiding the the 8 most common mistakes. Are you aware of the right method of saving your families home? Research, learn and prepare yourself a professional, acceptable and complete loan workout proposal. So, whenever you get in touch with your bank, know the right approach to adopt. Remember, to take your chances – help is round the corner, if you are aware of the correct way to get it!

All the assistance you need to prepare your do it yourself loan modification application is available by ordering and downloading the Complete Loan Modification Kit. This guide is easy to comprehend and low cost handbook that will provide you with all the tools and tips needed to prepare a professional and complete loan modification application. This handbook will provide you with all the necessary forms, checklists, templates and detailed instructions to complete the procedure correctly. Complete Loan Modification Kit will take you step by step in calculating your personal debt ratios, your financial statements, writing a compelling hardship letter and putting all the pieces of the puzzle together before submitting it to your lender. So do not wait and get going on your path to secure your family’s home, order and download the Complete Loan Modification Kit.

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