One of the best ways to prevent foreclosure is to apply for a mortgage modification. Even if your home is underwater, many banks offer this option because they’d rather keep an existing homeowner who wants to stay rather than risk having an empty property sit empty for months (or even more than a year) before it can be resold. This costs them money.
Home Loan Help: Why Lenders Like HSBC Bank Offer Mortgage Loan Modifications
It costs banks tens of thousands of dollars more to foreclose on a home than to work with the existing homeowner to prevent foreclosure.
According to a reportby the Joint Economic Committee of Congress in 2010,the average cost of a foreclosure, to the homeowner, lender, local government, and neighbors (whose homes decline in value [ie, are underwater]), is $78,000. By contrast, preventing the foreclosure would cost $3,300 per home on average.
Home Loan Help: Gather the Following Documents Before You Contact HSBC (or Your Mortgage Holder) for a Mortgage Modification
Now that you know why HSBC and other banks are willing to work with you to prevent foreclosure, following is what you need to gather in the way of paperwork to make it happen.
Proof of Income: Provide documents that prove what you earn, eg, pay stubs, child support payments, alimony payments, monthly income from investments, rental/real estate income, disability income, social security, etc.
Bank Statements: Most lenders will ask for the most recent 30-60 day statements.
List of Bills: What do you pay out each month, eg, cable, cell phone bill, electric bill, car insurance, homeowners insurance, life insurance, student loans, etc. List everything. And, don’t forget incidental, miscellaneous and/or quarterly bills like garbage, HOA fees, gas for your car, etc.
Home Loan Application for Modification: A Note about Secured Credit versus Unsecured Credit
While it’s prudent to list all of your monthly obligations, many lenders give less weight to unsecured credit obligations, eg, credit cards, when considering whether or not to give you a modification and/or how much it should be.
The rationale behind this is, who wouldn’t stop paying their credit card bills to save their home. Also, secured credit like mortgages and car notes take precedence over unsecured debt in most courts. This is because there’s an asset to be collected if the debt isn’t paid (eg, your home or your car).
So, just realize this as you’re listing your monthly financial obligations.
Home Loan Help: Your Hardship Letter
Besides the documents above, you’re going to want to include a hardship letter. This piece of correspondence simply explains why need a mortgage loan modification. Speak from the heart here; it doesn’t have to (in fact should probably not be) “official.”
Good look getting the home loan modification help from HSBC (or your mortgage holder) you need to prevent foreclosure!
Get more details on the specifics outlined above when applying for mortgage modification home loan help, as well as info on particulars to include in your hardship letter, at http://www.foreclosurebusinessnews.com/home-loan-help-documents-needed-to-apply-for-a-mortgage-modification.
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