The A, B, Cs of Getting Your Mortgage Modified
Millions of mortgage borrowers who can no longer
afford their mortgage payments but
can afford a lower
payment, can avoid foreclosure by getting a modification of their loan
contract. While the path to a modification remains torturous, it is not
quite as bad as when I wrote the first version of this article early in
Are You Unqualified?
It is not possible for borrowers, acting on their own, to determine whether or not they qualify for a modification because they don’t have access to all the criteria. Some is kept under wraps by loan servicers. However, borrowers can determine that they are not qualified for a Government-supported modification by accessing Treasury's Frequently Asked Questions at http://www.makinghomeaffordable.gov/about-mha/faqs/Pages/default.aspx.
Bear in mind, however, that servicers also offer modifications outside
of the Government's program. You might qualify for one even if you don’t
meet the Government’s requirements.
the Information the Servicer Wants
The single most important step in obtaining a loan
modification is providing the servicer with the
exact information the
servicer needs to make a decision. Each servicer has its own set of
forms that must be completed, and its own requirements for the
documentation you must provide.
In my first stab at this problem, I placed the information required by each of the major servicers on this site. Now borrowers can access the DMM Document Wizard at https://www.dclmwp.com/mtgprofessor_question.php, provided at my request by Default Mitigation Management LLC, which is a lot better. Based on your answers to the questions it asks, you will be provided with a customized list of forms you must complete and documents you must provide. It is free and will take the guesswork out of what you need.
Don’t Exaggerate Your
Warning: The servicer will examine your statements of income and expense
to determine whether or not you can afford a reduced payment.
Exaggerating your financial weaknesses may open his heart but close his
purse, if it makes you appear to be a lost cause.
Having the right form is one thing, filling it out correctly is
something else. Some industry executives estimate that about 95% of all
packages submitted are incomplete or contain errors. A package
with obvious errors may fall to the bottom of the pile, or it may lead
the servicer to conclude that you do not qualify for a loan modification
when, in fact, you do. Remember what you were taught in second grade:
1. Use a cover sheet that identifies all documents in your package.
Write your name and loan number on every page.
Preparing an accurate and complete set of documents is one thing,
delivering the package to the servicer is something else. Servicer
systems have been overwhelmed by requests for help and documents
routinely get “lost”. You want to minimize the chances of that
happening to you.
Using Fax or Certified Mail:
Make sure you have the correct contact information. Treasury
provides addresses and fax numbers of every mortgage servicer at
Certified mail is more reliable than fax, but neither guarantee prompt
attention by the servicer, or even that the documents won’t subsequently
be misplaced or lost.
Using the DMM Portal:
The best way to deliver documents to servicers is to use the DMM portal,
available through the
DMM Document Wizard by clicking on
“Submit Online”, or at
I have no financial interest in DMM.
If you use the portal, your documents are delivered to the servicer
electronically, and the portal then becomes a direct communication
channel to the servicer. The servicer uses the portal to acknowledge
receipt of your documents and to request additional information or
documents. You use the portal to make corrections, to send
additional information, and to update yourself on what has been
completed and what remains to be done. Questions by you are
automatically directed to the specific employee who can answer them. All
communications are time-stamped and remain in the portal as a record of
Unfortunately, not every servicer subscribes to the DMM Portal. The list
of those that do is shown on the DMM Wizard.
Follow-Up, and Then Follow-Up Again
Because the process of modifying mortgages remains slow and error-prone,
you may need to nudge the servicer. If you faxed your documents, you
should follow up to make sure the papers haven’t been lost and the case
is in an active queue. But even if you use the DMM Portal, you should
follow up with the servicer regularly to make sure your application is
Next week: getting help with your modification without getting scammed.
Thanks to Igor Roitburg.