Lots of people are looking to modify their home loan in one of several ways, but not a lot of people know exactly what they have to do to start the process. Remember, there are actually several different ways a home loan can be modified. And while the government is encouraging banks and homeowners to work together, there’s been a lot of confusion on the part of many home loan customers about exactly what they have to do to get a mortgage modified and monthly housing payments reduced.
First, it’s important to understand that banks would rather have you living in your home and paying them something than not have you in the home at all. Banks don’t want to own a bunch of empty houses they may or may not be able to sell. They would rather get regular monthly payments from you, even if those payments are reduced from what they once were, rather than foreclose on your home and evict you.
That being said, some banks and some lending institutions are obviously better about modifying mortgages than others. Bank of America, one of the largest mortgage lenders after buying Countrywide, has a reputation of being reluctant to modify home loans. Larger banks will actually have entire departments devoted to home loan modification, while some smaller community banks may only have a few customer service reps who specialize in modifying mortgages. Yet smaller banks are often more willing to help individuals reduce their mortgage payments so they can stay in their homes.
Here, then, are some tips for what you can do to increase your chances of getting a bank to work with you to modify your home loan.
Call The Right Department: When you first try to contact your bank about modifying your home loan, you want to make sure you are speaking to the correct people. You can ask for a “Loan Modification”, “Homeownership Retention” or a “Loss Mitigation” department. Some banks have entirely different loan departments based entirely on the type of the home loan you have. Loss mitigation is the department in many banks that handles loan situations where defaulting on the loan is very likely. That should give you some indication of how serious you have to be modifying your home loan