Key insights and secrets to successfully obtaining a mortgage loan modification from your credit union.



In a land filled with toil and strife, in a land where it seems like another crisis is always looming, in a land where you lost your job and have found a new one that pays less, the idea that your credit union would be willing to refinance your mortgage to a lower interest rate seems a thing of myth and of legend.  As you look around you only see foreclosures to the right and left.

Is the Myth a Reality?

But the stories persist of those who were able to get the credit union to modify their loan.  Were they lucky, did they know a guy, or did they have insider knowledge?  Quite likely, it was all three.  They were lucky enough to find a guy, or gal, who had knowledge of how the system works.  These mysterious miracle workers are commonly referred to as housing counselors.  They typically work for non-profit agencies seeking to help those that are in danger of losing their homes.  Other places they can be found are forward looking credit unions and banks.

Insight One – Fill Out Everything

From their tomes of mystic lore, the following insights have been gained.  First, whatever loan modification program you take part in, fill out the complete package.  This will often include paycheck stubs, a hardship letter, a budget, along with other supporting documentation required by a specific lender.  A note to the wise, even a single missing document or two can cause your application to be sent directly to the end of the line

Insight Two – Ask Questions, Ask Questions, Ask Questions

Second, ask questions about anything you don’t understand or are unsure of.  For example, two paycheck stubs are often requested on the assumption that they represent a month’s worth of income.  If you only get paid monthly, or are paid every week you will want to make sure you send in the correct number of stubs.  (Yes, it is like adding the wrong amount of eye of newt to a potion – you don’t want to get it wrong!)

Insight Three – Let Them Know You Are There

Third, stay in touch and be persistent.  Like creating a long complicated spell, you should check in at least every week.  Check to see if the file is complete, explain any special or changed circumstances, and respond as quickly as possible if something is lacking.  Finally, don’t get frustrated if they ask for more information or for your to resubmit certain documents.  Good things, like good wine, takes time to bring about.

Secret One – There Is Not Just One Loan Modification Program

Additionally, secrets have also been obtained from those who actually provide these magical modifications, and I was assured no torture was necessary to obtain them.  Secret number one, certain programs, such as the federal governments Home Affordable Modification Program, are guideline specific, are not negotiable at all, and require full income documentation.  If you situation does not fit these arcane requirements, you can’t use the program.  Don’t despair, for modifications come in many flavors, and a good counselor or credit union will help you find one which you do qualify for.

Secret Two – Label All Documents and Make Sure They Are Perfect

Secret number two, label all your documents.  Many credit unions and banks receive tens of thousands of pieces of paper every day from hundreds or thousands of borrowers.  Put your name and loan number on every document, make sure the packet is complete before sending, and call to make sure all pages were received.  Finally, make sure each page is clean and clear.  Don’t scratch out mistakes.  Each page should be pristine.

Secret Three – Prove Your Income, IRS Style

Secret number three, release your tax return.  You will be asked to sign IRS Form 4506-T which allows the credit union or bank to access the homeowner’s federal tax returns.  The lack of being able to provide solid proof of income is the number one issue in modification not occurring.

May Success Be Yours!

Good journey!  May these insights and secrets help you find and obtain one of these legendary modifications for you and those you hold dear.

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