How Can You Get a Bank to Work With You on Your Home Loan?

Communicate

If you fall behind on mortgage payments and need to modify the terms of the mortgage to keep the house, do not ignore the problem. Open all mail from your lender and, at worst, return phone calls to the lender; at best, initiate contact with the lender. Avoid conveying the impression that you are trying to dodge interaction with the lender. Avoidance diminishes the likelihood that the lender will work with you.

As of 2011, a mortgage may be sold several times after the initial loan is made. Sometimes the mortgage is packaged with others and sold as a mortgage security, which means you actually have more than one lender with a stake in your home. Before approaching anyone about a loan modification, you must find out exactly who owns the mortgage. It is easier if it is owned by a single local bank that will not require multiple approvals on a new payment plan.

Complete all paperwork honestly. Avoid the temptation to hide certain personal information or fudge financial numbers. Discovery of failure to disclose all relevant information---or misrepresentation of information---will make matters worse. The process will go more smoothly if you gather the needed paperwork beforehand: gross income, tax returns, mortgage statement, credit card balances and other debts, and a hardship letter.

Before any lender will approve a loan modification, it is likely to require a hardship letter. The success of the modification might hinge on this one factor. The purpose of the letter is to explain in detail to the lender exactly why you fell behind in your mortgage payments. Make sure that your description of events matches up with the reality of when you began to struggle.