The government sponsored modifications have specific program processes and certain eligibility requirements the homeowner must meet. An in-house modification may have more flexibility unless the investors are restrictive about the modifications the lender or servicer may offer.
Loan modifications can make a costly loan more affordable by lowering the required monthly payments through lowered interest rates or an extension of the loan’s term from thirty years to longer. The loan’s owner can also choose to make an outright reduction in the loan’s principal.
Typically, you request a loan modification by working with:
- Your lender or servicer;
- A certified housing counselor. Call 1 877 894 HOME to be connected to a counselor in Washington; or
A company licensed to provide loan modification services. Companies in Washington must be licensed by the Washington State Department of Financial Institutions.
See: About Loan Modification Service Providers
Gather and organize your financial documents
(These will be useful throughout the process)
Contact information for your mortgage lender or servicer
(This information can be found on the mortgage statement that arrives each month)
- Proof of recent mortgage payments
- Bank statements of previous 3 months
- Pay stubs for last 90 days, 6 months if self-employed
- Most recent tax return
- Recent utility bills
- Documentation of homeowner association dues, if applicable
- A list of your income and monthly bills
- Contact information for your mortgage lender or servicer
Contact your lender or servicer
Start by contacting either your lender or loan servicer. The servicer, if different from the lender, is the company that processes mortgage payments. Call the telephone number found on the mortgage statement that arrives each month. Be prepared to explain your situation and provide any documents required.
Contact a certified housing counselor
If working with your lender does not yield the results you are looking for, contact a certified housing counselor. These counselors can work with you and help you determine if you’re eligible for a loan modification. Call 1 877 894 HOME to be connected to a counselor in Washington.
Learn more about the Washington Foreclosure Fairness Program
The Washington State Foreclosure Fairness Program provides homeowner foreclosure assistance by offering free housing counseling, civil legal aid, education and outreach, and the opportunity for mediation. The program is administered by the state’s Department of Commerce.
To learn more about the program, visit www.commerce.wa.gov/foreclosures
Learn about the Making Home Affordable Program
The Making Home Affordable Program is a government sponsored modification program. The program has several different options to help homeowners get mortgage relief and avoid foreclosure.
Visit www.makinghomeaffordable.gov to learn more and find out if you are eligible for this program. If you are not, you can still request an "in-house" modification from your servicer or lender.