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Good morning and thank you for your excellent question; I’m sure this is on the minds of many homeowners who are considering a loan modification. I’d like to answer by talking about the loan modification process.
Whether you engage a third party loan modification company or through the lender itself; your first conversation will be some information gatheringby whomever you are working with. Questions regarding your personal financial situation, why you are seeking a modification, etc. After that interview the homeowner will be asked to provide some documentation regarding financial status, along with a letter of explanation detailing why a loan modification is requested.
When filling out what is referred to as an income and expense sheet. This is where your question comes into play. Each loan modification is addressed on a case-by-case basis. So, your situation will be considered apart from others in your situation. Your ability to pay, if your mortgage is adjusting, your work situation and the such are all taken into consideration. Showing a surplus of money at the end of the month doesn’t disqualify you from a loan modification, but a net loss (where you may be delving into savings to make ends meet each month) would illustrate a greater financial hardship. My word of advice though is to be as honest and accurate as possible in providing financial information (they will verify) and don’t create or inflate numbers. If you always tell the truth you don’t have to remember what you said.
More and more lenders are willing to work with homeowners in getting them a payment that is affordable as foreclosure is a costly process for the lender as well as the least desired outcome.
To qualify for a loan modification, do you have to have a net loss at the end of the month after paying for all the expenditures?