When individuals are facing financial troubles, one of the areas that might affect them is their mortgage payments. There are some options that they have to assist with this situation. Loan modifications are something to consider. With this, your loan can be adjusted to better fit your financial situation and to allow you comfortability to pay at your own pace. Financial situations are always rough. They have the ability to impact all aspects of our lives. That is why it is important to know and understand processes that can help with your finances. Our professional attorneys can guide you toward a resolution to ease your stress.
There is a difference between loan modification and mortgage refinancing. They are not the same process, but they both have the ability to aid during times of financial distress. Mortgage refinancing is when an individual seeks a new loan instead of adjusting an existing loan. Loan modification adjusts a present loan to improve upon the situation that the debtor is in.
How is a hardship letter involved in the loan modification process?
When requesting a loan modification, there are documents that you must provide throughout the process. These documents include a financial statement or profit and loss statement, a personal or business bank statement, pay stubs from each wage earner in your family, personal or business tax returns, a current utility bill proving you reside in the house and a hardship letter. The hardship letter is intended to explain the reasoning for your current financial situation Applicants are required to detail the reason for their inability to pay the mortgage.
Why may I get denied?
For the loan modification process, banks can refuse applicants for many reasons. Banks may not approve a loan modification if the homeowner cannot prove sufficient income to pay their monthly mortgage. This prediction can have a big impact on the applicant. When banks are reviewing applicants’ files, they have a set of guidelines to follow in order to determine if an approval is the right decision. If the mortgage can be returned to a current status, then the loan may be modified. If it cannot, then the bank may take possession of the house and cut its losses.
During this time, it is helpful to have a professional attorney on your side. They can better prepare you for the process. With legal counsel, you may have a chance at getting a loan modification approved.
If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.