Personal qualifications

As long as you can verify a legitimate financial hardship that impacts your ability to make your loan payments, you may qualify. Contrary to popular belief, you do not need to be behind on your payments before a lender will consider doing a loan modification with you. If you are behind on your payment or facing foreclosure, applying for a loan modification places a temporary halt on the foreclosure process.

Mortgage qualifications

In order for your loan to qualify for modification, the following conditions must apply:

• You obtained your mortgage on or before January 1, 2009.
• You owe up to $729,750 on your primary residence or single unit rental property.
• You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property.
• The property has not been condemned.
• You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify).
• You have sufficient, documented income to support a modified payment.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering, or tax evasion, in connection with a mortgage or real estate transaction.

What if I don’t qualify or have been denied?

Unfortunately, not all struggling homeowners qualify for the government modification program. Credit.org, a HUD-approved housing counseling agency, has developed three programs to help homeowners who have been denied or do not qualify for this federal program:

• The Home Affordable Foreclosure Alternatives (HAFA) Program – Government assistance for a short sale or deed-in-lieu of foreclosure

Other Loan Mod Programs

• VA Loan – If your home mortgage is a Veterans Administration (VA) loan, then there is a specific government program called the Cal Vet Modification.
• FHA Loan – There is a loan modification program specifically for Federal Housing Administration (FHA) loans
• None of the Above – Banks who do not participate in the government programs may have their own unpublished loan modification programs with a different set of qualifications.