- Northern Illinois to get $8.3 million for state construction projects
- Tree-lighting festival kicks off holiday season in Machesney Park
- Roscoe Boy Scout Troop’s tree stand at new location
- Tips for selecting safe toys for kids this holiday season
- Prayer service for World AIDS Day Nov. 30
- Food Bank joins national #GivingTuesday movement
- Lee Hamilton: What lies ahead for Congress
- Rockford Public Schools faces $8.8 deficit, board OKs flat tax, HR chief
- Literary Hook: A holiday tradition: ‘This Thanksgiving, Remember’
- Cold snap does not negate global warming
Requesting a loan modification
By Jim Hagerty
A loan modification is a transaction where the terms of a loan are changed because the borrower is unable to make payments. Since 2007, hundreds of thousands of home owners have sought loan modifications on adjustable-rate mortgages because payments ballooned after the initial fixed period. With most lenders still sitting on an idle pool of foreclosures, many are willing to restructure problematic loans instead of seizing property and adding to overstocked REOs.
→ Gather your financial documents, including your loan statement, paycheck stubs and W-2 forms. Some lenders may ask to verify that you are employed. If you are receiving unemployment benefits, keep your benefit letter handy.
→ Contact your lender and ask to speak to a representative who specializes in loan modification or foreclosure avoidance. Explain your situation clearly. The representative will likely ask you to propose a new payment you are willing to make.
→ Review your financial situation and make a proposal for your lender. Include a list of your monthly debt obligations, including your new proposed payment, and compare it to your gross monthly income.
→ Pitch the new payment to your lender. Your bank will either accept your proposal or negotiate another payment arrangement.
From the July 7-13, 2010 issue