Loan Modification Submission Package

ModifyLoansFree.org Free Bank Ready Loan Modification Submission Package: Forms and Instructions  Explanation of How to Properly Fill Out Forms  Loan Modification Fax Cover Sheet  Example Cover Letter  Loan Modification Proposal  Real Estate Cash Flow Worksheet  Expense Worksheet  Income Worksheet with Disposable Income Calculation  Example Hardship Letter  Example List of Hardships Brought To You Completely Free of Charge by: www.ModifyLoansFree.org sponsored by American Family Assistance Foundation, Inc. Completely Free, Online tools to process your loan modification application. Create a Free account at http://www.modifyloansfree.org 1-800-506-0164 Ext. 300 info@ModifyLoansFree.org Last Updated: June 29, 2009 Explanation of How to Fill Out Forms Form 1: Cover Letter Cover letters are not required but we find them to be important. Most of these loss mitigation departments are overwhelmed. If you are organized and professional you are one step up. When negotiators/loss mitigation agents can navigate through your information quickly it prevents frustration. Also, it shows that you are on your game and are ready to fight for the best modification. Form 2: Loan Modification Proposal Your loan modification proposal is designed to present to your lender your request for certain loan modifications. It is also going to include pertinent personal financial information and market conditions. Be prepared to document any claims made on the proposal. No lenders require a proposal but all will look at it and consider the information on it. Form 3: Schedule of Real Estate Worksheet Fill out the form as accurately as possible. These numbers will be reflected on your credit report so be exact. Your cash flow will automatically populate the corresponding worksheet. If you are getting a negative total cash flow, it will appear on the expenses worksheet. If you have a positive total cash flow, it will populate on the income worksheet. Form 4: Monthly Expenses Worksheet Your monthly expenses should also be filled out accurately. Do not leave off an expense that is imperative to your daily life as it will cause problems on either your modification or your ability to pay your mortgage after the modification. This list is pretty detailed. If you have other expenses, specify. Not all lenders require the balanced owed so do not focus on that. Banks want to know what you pay out each month vs. what you bring in. Form 5: Monthly Income Worksheet and Total Disposable Income When filling out the monthly income worksheet remember that it is based on NET INCOME. This means after tax, take home income. If you are self employed, use what you actually make per year minus taxes. Also, include tips and other non-documented income if needed. It is highly unlikely that your bank will report you to the government. Rental income includes rooms or other units that you rent out in your house or on your property. If you do not have income in any section, leave it blank. A person does not have to be on the loan/mortgage to use their income to qualify. As long as they live in the house their income can be included; but so must their expenses. This includes older children who contribute. Monthly net income minus monthly expenses equals the monthly disposable income. This is the number that is used to determine the mortgage payment and left over cash for incidentals. If this number is negative the homeowner will get declined for a modification. This is where one must adjust the interest rate, amortization and principal balance to back in to this number. Form 6: Hardship Letter Hardship letters are intended to show lenders why someone could not or cannot make their payment as scheduled. If your hardship is permanent but you still have income, you might be a candidate for an aggressive loan modification. If your hardship is temporary, you might be eligible for a less aggressive loan modification. Fax Cover Sheet To: From: Phone: Pages: Fax: Date: Regarding: CC:  Urgent  For Review  Please Comment  Please Reply  Please Recycle Borrower: 1st Servicer/Lender: Co-Borrower: 2nd Servicer/Lender: Loan# Loan# Property Address: City State Zip Comments This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you received this message in error, please advise the sender immediately by calling the number above and please shred this fax. Thank you for your cooperation. Cover Letter Your Name Property Address Lender Loan Number(s) Date To Whom it May Concern; [find out who will be receiving this, sending it to a department is acceptable as long as it is labeled correctly] Attached you will find my proposal and supporting documentation for a loan modification regarding loan number:[ ###########]. After analyzing my income and the current real estate market the following proposal seems fair to both parties involved. I am currently unable to afford the mortgage payments how they are. However, I will be able to maintain the proposed payments consistently on-time for the foreseeable future. I would prefer to stay in my home at these payments but if a modification is not possible I will be forced to foreclose. New Principal Balance: $[the amount of the balance of your loan you are requesting] New Interest Rate: [interest rate you are requesting] New Amortization Period: [year of loan example: 30 years] New Payment: $ [excluding taxes and insurance you are requesting the loan be modified to] A further breakdown and analysis to follow. Documents included, in order: [include the documents indicted below with your request. Or delete them if you do not include them]. Proposal Form Real Estate Cash Flow Worksheet Income vs. Expenses Worksheet Most Recent 3 months paystubs Last Year’s 1040s/w2s Most Recent 3 months Bank statements Hardship Letter Value Assessment Forensic Review including Violation code if applicable Your Name Here [Signature as it appears on your loan documents] Loan Modification Proposal [Obviously remove the commentary before submitting] Request to Modify to the Under Following Terms: Current Existing Balance: Current Fair Market/New Principal Balance: (Have supporting documents) Principal Balance Reduction: [merge replace] [merge replace] [merge replace] Current Interest Rate: Requested Fixed Interest Rate: [merge replace] [merge replace] Amortization Remaining: Requested Amortization: [merge replace] [merge replace] Previous Payment: New Payment: [merge replace] [merge replace] Disposable Income for Housing: (As determined from the Income vs. Expense worksheet) [merge replace] Disposable Income Post Modification: [merge replace] Comparable Homes Foreclosure Auction Price: (Have supporting documents) [merge replace] State Timeframe to Repossess Property: [merge replace] Late Fees/ Penalties: Forgiven/Waived Late Balance: Incl. in New Principal Balance Market Rent for Similar House in Neighborhood: (Should be accurate) [merge replace] Requested Next Payment Date/ Forbearance: (Request 3 Months Away) Real Estate Cash Flow Worksheet Borrower: 1st Servicer/Lender: Co-Borrower: 2nd Servicer/Lender: Loan# Loan# Property Address: City State Zip [Please complete schedule of real estate owned for all properties you own or show on your credit profile in table provided below as Servicer/Lender may request documentation pertaining to all properties]. Property Address (enter S if Sold, PS if Pending Sale or R if Rental being held for income) 1) Amount of Mortgage & Liens Total Mortgage Payments Type of Property Gross Rental Income Insurance Taxes & Misc Rental Income Rental Loss 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) Type of Property: SFR: Single Family Resident | PUD: Planned Unit Development | Condo: Condominium | Units | Commercial | Land Amount of Mortgage & Liens: Add your total existing mortgage balances or liens on property Gross Rental Income: Estimated property’s current market value Total Mortgage Payments: Your total current mortgage payments. This may include Taxes and Insurance Insurance Taxes & Miscellaneous: Leave blank if payments are included in your mortgage payment. You may add HOA fee to this field if applicable Rental Income: If Gross Rental Income is greater than Total Mortgage Expenses Rental Loss: If Gross Rental Income is less than Total Mortgage Expenses Expense Worksheet Monthly Expenses Property Taxes Homeowner Insurance H.O.A Fees Other Mortgages /REO Credit Cards/Unsecured Loans Auto Loan Auto Insurance Child Care Alimony/Child Support Medical/DR. Expenses Health Insurance Life Insurance Cell Phone Other Phone Gas/Heating Electricity Trash/Sewer Food Water Transportation/Gas/Bus Fare Cable/Satellite Clothing Other 1 (Specify) Other 2 (Specify) Other 3 (Specify) Other 4 (Specify) Other 5 (Specify) TOTAL Household Expenses (A) Monthly Payments Creditor/Bank/Servicer Income Worksheet Source of Monthly Income (After Taxes/Net) Net Monthly (1040s, W-2s) Commission (1099) Overtime Bonus Tips or Undocumented Income Earned Interest/Notes Rental Social Security Pension/Retirement Disability Child Support/Alimony Unemployment Other 1 (Specify) Other 2 (Specify) Other 3 (Specify) TOTAL Household Income (B) Borrower Co-Borrower Sub-total Income Making Homes Affordable: Gross Monthly Debt To Income Ratio Calculation: TOTAL Monthly Mortgage Payment st on Your Primary (1 ) Mortgage (A) / / TOTAL Gross Household Income = = Total Debt To Income Ratio (DTI) $ $ $ Disposable Income Calculation TOTAL Household Income (B) $ - TOTAL Household Expenses (A) $ = = Disposable Income $ Hardship Letter July 18, 2008 Regarding Borrower: [Your First and Last Name] Subject Property: [Any Street, Las Vegas, NV 89122] 1 TD with Lender Loan # 38678763 2 nd st TD with Lender Loan # 36787638 Dear Lender/Servicer: (Handwritten is best) I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. I/We have tried everything in our power to keep current on our mortgage payments but unfortunately we have fallen short and would like you to consider working with us to reduce our payments The main reasons that caused us to be late are the substantial Curtailment of both of our Income, Excessive Obligations and our Inability to Refinance. I work as a waitress and my husband works as a taxi driver. Our total household income is generated mainly from tips. It has decreased dramatically due to the unfortunate economic situation. People are not coming to Vegas as much and for those who are they are not tipping much. We both are full time employees and can’t get a part time job since we have a 3 year old son. For the past several months we did pay our mortgage from our credit cards but now we don’t have sufficient money left on our credit cards to afford our mortgage payments. We are trying to save up some money to hopefully work a payment plan with you after you reduce our rates to something we can afford. My husband and I consulted mortgage professionals regarding refinancing our home to lower our current payments but we were told that there was not enough equity in our home to do so. I have no others choice but to ask you to please consider my request of a loan modification. My family and I would really be grateful if you can help us work a payment plan because my family and I do not want to lose our home. I want to keep making mortgage payments on time and not have this nervous tension that is over my shoulder. Sincerely and Respectfully, Your Signature as you signed your loan documents at time of purchase or last refinance Example Hardship Letter Example list of hardships that lenders consider during the loan workout process: - Adjustable Rate Mortgage Reset- Payment Shock Death of Spouse of Co-borrower Damage to Property (natural disaster or unnatural) Divorce Failed Business Illness Job Relocation Loss of Job Incarceration Marital Separation Military Duty Medical Bills Reduced Income Disclaimer These forms are intended as a sample to assist borrowers through the loan modification process. ModifyLoansFree.org does not guarantee the approval of any loan modification, accept any liability for or guarantee the effectiveness of these forms. Forms are copyright protected by ModifyLoansFree.org. Selling or Distributing is prohibited by law. Notes: Please replace any items in [Bold Italics] with the correct information on your particular situation. Visit www.ModifyLoansFree.org to print your custom merged Bank Ready Submission Package, download helpful hints and a list of documents needed. Completely Free