Loan Modification Application- Documents You Will Need

If you are struggling to pay your monthly mortgage payments each month you should strongly consider applying for a loan modification with your lender. A loan modification changes the terms of your loan to make your monthly payments more affordable. This can be accomplished through lowering the interest rate, extending the payment schedule on the loan, or forgiveness of part of the principle. A loan modification can help you get your finances back in order and help save you from losing your home in foreclosure.

To apply for a loan modification you will need to fill out a loan modification application. There are quite a few documents and pieces of information you will need to supply your lender. It is very important to be accurate and thorough in providing your lender with your financial information and to present a compelling case for why you are a good candidate for a loan modification. Here is a list of documents and items you will need to help you get started on your loan modification application.

Loan Modification Application

- Borrower Information Sheet. This is the part of your loan modification application that contains your basic personal information such as name, address and social security number.

- Hardship Letter. You need to write a brief, but compelling hardship letter stating the nature of your hardship and why you are not able to meet your monthly payments. Examples of acceptable hardships are loss or reduction of income, divorce or death in the family, medical bills, and job relocation.

- Financial Statement. This lists your income and assets and presents your case for why you cannot meet your current payments but at the same time shows how you will be able to meet revised payments under a loan modification agreement.

Supporting Documents

- A cover letter that explains why you are submitting these supporting documents. Also provide a list of the all documents.

- Copies of your federal income tax returns for the last two years

- Copies of your W-2 forms for the last two years

- Copies of your pay stubs for the last two months

- Copy of your latest mortgage statement

- Copy of your latest property tax statement, if your property taxes are not in escrow

- Supporting documents, such as hospital bills, death certificate or divorce papers.

- Your last two bank statements

- Copy of your homeowner's insurance policy

- Copies of any letters from credit counselors or financial advisors that demonstrates that you are attempting to correct your financial situation.

It is very important that you submit a compelling, accurate and thorough loan modification application. Use this checklist to gather your information and present a compelling case for your loan modification in your hardship letter and financial statement.