Home Loan Modification Video #2
Preparation Of The Financial Documents
In this episode we’ll be talking about the preparation of the financial documents that are required in every home loan modification.
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A Bank’s primary job is to consider home loan modifications from a financial perspective this is why Submitting your financial information may be the most important thing you do in requesting your home loan modification. This is your opportunity to make your information accessible to people responsible for approving loan modifications.
This will be a summation of your entire financial situation and most banks provide a template on their website. We have developed a 5 page template included in our Loan Modification Software, Loan Modification Binder and Loan Modification Guide for our clients that incorporates the financial information that we have seen requested by every Bank/Servicer/Insurer/ or Mediator in order to be approved for a loan modification. You are able to download a simplified version of our Financial Budget Template at our website. Our client version includes calculations we have found the Banks make in their evaluation process for a home loan modification. We include these in our client version to save the Bank representatives time from performing the calculations and we have found they appreciate it but it is not necessary for your loan modification program or any present loan modification programs.
In case you were wondering why banks need so much information… Studies have shown that banks can possibly promote more homeowners to become delinquent – costing more money to the bank, local, state, and federal governments, and communities - by approving a home loan modification – this risk is avoided by what is considered full disclosure of client information and the bank only approving those that meet the requirements. Think of this next time you consider leaving some information out of your application.
1st you will want to include identifying information of the owner and any co-owners on your Financials. This includes at least Name of the person on the mortgage and Property Address but you can include the Owner Date of Birth, Last 4 of SSN, Number of Dependents, Employer’s Name, Job Title, Date of Employment (for each job), the Assessor Parcel # (APN), Trustee, and the TS #.
After the Section on Personal Information we recommend a section on Income for the Household for more than 1 month. Though most Banks only request 1 month we have found it is helpful and useful information to them and they appreciate receiving more than 1 month for evaluating your home loan modification application. For this section you will want to include your Gross Employment Income and any other income, such as: Unemployment Income, child support/alimony, disability income, rental income, pension, interest, trust payments, dividends, and Royalties. For All of your monetary entries I always recommend including Dollars and Cents – Just picture the person you rely on for money telling you that they estimated or rounded the numbers. I can tell you that the clients we have helped find miscalculations in their paycheck amounts weren’t happy with their employer. So show the same courtesy and include exact numbers if possible.
After the Income information we provide a section including all household expenses which with most consumers breaks down into: payroll deductions; housing; Utilities; Food; Clothing; Transportation; Medical; life insurance; alimony; School Expense; Amount owed on other debts; and a section for Miscellaneous.
Finally most budget templates for loan mods finish up with a listing of Assets. The most common assets are: Property; Automobiles; Checking/Savings Account; Retirement Accounts; Stocks; Bonds; or CD’s.
In situations where there is a delinquency We include an additional section for the Reason - this key point of information will tie into the financial hardship letter and may prevent the bank rep from having to go back and read the entire letter again following review of your entire mortgage loan modification proposal.
These are the necessary components of a home loan modification financial budget template – once you have signed and dated them they will be ready to send off with the rest of your home loan modification application.
In our next episode we will discuss the Financial Hardship Memorandum. I am Loss Mitigation Specialist Damian Falcone and this is get modified.
We have produced a Loan Modification Software and Loan Modification Guide to help homeowners get a better understanding of their situation and in some cases do the modification themselves. We are happy to be a member of Las Vegas Loan Modification and look forward to making a difference in our surroundings. Also available on this site are our instructions for assembly of our Loan Modification Binder and what we consider Loan Modification Vital Documents.