How to Negotiate Your Own Loan Modification

Decreases in property values, loss of jobs and other factors have resulted in 1 in 8 homeowners finding themselves behind on their payments. Lenders, backed by government programs such as HAMP (Home Affordable Modification Program), are modifying loans in increasing numbers in lieu of foreclosure.

Over the last couple of years, difficult economic times have introduced companies that charge exorbitant fees to work with lenders to modify home loans. Unfortunately, many (certainly not all) are fraudulent or act with limited integrity. Please note that it is illegal for individuals and businesses offering loan modification services to charge any up-front fees.

I generally encourage homeowners to negotiate directly with their bank by filing a workout/hardship package. Take a peek at this e-book from US Home Loan Advocates on how to pursue your own loan modifications. This is a fee-based service company and I do not advocate or recommend using their services, I merely found the attached information reasonably comprehensive.

Before contacting your bank, I suggest you put together the following items: current driver's license, two most recent pay stubs, two most recent W2s, two most recent tax returns, three most recent bank states, and other asset statements, a hardship letter and a list of your current expenses (financial worksheet).

Good luck to you and happy negotiating!