Be honest with yourself and your lender.  Before you begin the process of pursuing either a Forbearance Agreement or a Loan Modification, ask yourself if this is the best course of action for your financial situation. If you are not in a position to keep your newly negotiated agreements (or the agreements you are about to negotiate) then a Loan Modification may not be the best option for you. You need to negotiate in good faith and only make offers that you can keep.

 



 

 The process of getting a Loan Modification requires a great deal of your time and effort.  Your lender will expect you to submit information that will prove to your lender that once the terms are re­negotiated  you will be able to keep up your part of the settlement.  Some of the questions your lender will ask you will touch on some sensitive and personal issues.

 



 

Honestly assess your financial situation.  Ask your self “Do I really have a steady financial foothold?  Are the situations or circumstances that put me in this position finally and truly behind me and am I in a position to move forward?”  Loan Modification may not be the best route for you to take.  Remember that Loan Modifications are great tools to help people who have suffered a  temporary financial set back that led to a delinquency.  Loan Modifications are not for those who have chronic financial instability or are still going through a rough financial situation with out a resolution in the foreseeable future.

 



 

 If you are looking at a Loan Modification be certain that you can afford the new monthly payments that you are hoping your lender will approve.  Going through the whole process is a waste of time if in the end you end up with a payment you still can’t afford.  Know what you are able to pay for your new mortgage and ask for it.  Your lender may be unwilling to make the adjustments you are asking for, but that does not change what you can or cannot afford.  It is important to ask for an adjustment that puts the monthly payment back into the range that you can afford from month to month.

 



 

NOTE:  While taking a hard look at your financial situation you must also take a hard look at what you can cut from your household budget.  Be prepared to make sacrifices and modify your spending habits to reduce your “discretionary” expenses.  Remember you are asking your lender to forego money that they are entitled to, and that you promised to pay, you should be willing to make sacrifices and adjustments as well.

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