Avoid Foreclosure With A Loan Modification

Millions of homeowners face foreclosure every year. With a sluggish economy and ever increasing work layoffs, the situation doesn't seem to be getting any better. Alternatives to foreclosure and bankruptcy have been created to meet these challenging economic times. A loan modification is one alternative to foreclosure that can not only keep financially struggling homeowners in their homes, but reduce the losses of lenders as well. Lenders face high costs during the foreclosure process, and even if the property sells will usually suffer a large loss on the loan. With a loan modification the terms can be changed to make the monthly payment more affordable for the borrower. This is far less expensive for the lender and the borrower stays in their home and makes reduced monthly payments.

In order to avoid foreclosure and stay in your home, you must contact your lender's loss mitigation department and ask for a loan modification application. You need to do this before your financial situation becomes so dire that you are unable to meet even lower monthly payments. Before contacting your lender you should come to a general understanding of how the loan modification process works and learn as much as you can about your lender's loan modification eligibility requirements.

Once you have received your loan modification application you need to fill out all the required forms and attach any supporting proof of income or other documents that your lender requests. Make sure to request a loan modification that fits within the guidelines of your lender's criteria. Also keep in mind that avoiding foreclosure is not only beneficial to you but your lender as well.

When you fill out your loan modification application forms, you need to build a convincing case that you are a good candidate for a loan modification. You will need to demonstrate that you are facing financial hardship with a well written, concise hardship letter, and also provide evidence in the form of a financial statement that you have the means to meet lower monthly mortgage payments under a loan modification agreement.

Taking the time to become familiar with the loan modification process and submitting a thorough and compelling loan application is well worth it. Your efforts can help you avoid foreclosure and allow you to stay in your home while at the same time rebuilding your finances. Learn all you can about the loan modification process to see if it is right for your situation. Foreclosure is not your only option.