You’ve taken the necessary steps by talking to the loss mitigation department at your bank, and you’ve finished applying for loan modification. You’ve written a financial hardship letter and finished the application. What should you do next?
Of course it depends on your bank and their workload, but it approval could take anywhere between a week to a few months. Be understanding: the loss mitigation specialists have a lot on their plates at the moment. New applications arrive daily, and they are understaffed and scrambling to try to process each one in a timely fashion.
Most lenders process applications in a first come, first serve manner. Specialists will have to research all the information you provided to see if it is correct and up to date. If they find any errors or inconsistencies, they’ll need to call you about the problem. After that, the whole processing will have to begin all over again. That’s what makes it so important to fill out your application correctly and take your time before sending it in. Not taking your time can be a costly mistake that causes you precious wasted time.
In the event of approval, you’ll get notification mailed to you. Some banks will also call or email with the good news. The notification states the new modified loan terms. But unlike when you buy a car at the dealership, you don’t get to respond with a counter offer. Your application information has been your negotiator. The choice now is whether to accept or reject the deal your lender is willing to offer.
If you don’t know whether you received a reasonable offer, you need to contact a financial counselor with legal counselors to assist you in sorting out your finances and help determine what’s really fair. Most of the time, however, you’ll get what you’re entitled to with loan modification. After you sign the agreement and return it, the modified loan terms become effective.