Can Loan Modification Services Save My Home?

While it is possible to negotiate directly with your lender, it is generally not recommended. There are many pitfalls that can cause your modification attempts to go awry. The online forums and chat rooms are full of horror stories of troubled homeowners who tried, in good faith, to negotiate with their lenders, only to be given the run-around. You'll want to apply for loss mitigation with a professional company that will ensure everything is done right.

The reason it's so important to strictly follow the lender's process is that they need to make a sound business decision. As such, they are going to review everything about your financial situation and whether or not modifying the loan will actually result in you successfully making payments in the future. If something is done wrong, it can kill your chances.

What you'll need for the process:

A good loss mitigation company is going to have a process in place that they know works. They'll have a package for you that will include such things as a financial worksheet, hardship letter template and a checklist. Trying to put all this together on your own without knowing exactly what's needed can be a nightmare.

You'll also need to gather certain documents such as W2s, bank statements and tax returns. Make sure you are given a checklist that helps you keep track of everything you need.

What happens once your loan has been modified?

A loan modification is permanent. A new contract is drawn up with the revised terms and you and the lender will be expected to adhere to the new conditions.

In addition to loan modification programs, other options available to distressed homeowners include refinancing, short refinance, short sale, and filing bankruptcy. Most loan modification specialists offer a Free consultation to help you decide what the best course of action will be in your individual situation.