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- Man faces charges following attempted armed robbery
- Discovery Center experiences record public attendance
- Pet Talk: Probiotics for your pets
- Illinois home prices climb 3.7 percent in December
- Supreme Court and gay marriage — U of I expert weighs in
- More than 6,100 residents of Winnebago County enrolled in Marketplace
- First large U.S. delegation to visit Cuba since opening of relations
- Merger complete for Illinois Bank & Trust, Galena State Bank
- Crusader welcomes Dr. Maria Lozano Vazquez
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