What Homeowners Need to Know about Wells Fargo Loan Modification Terms and Requirements
Wells Fargo is participating in the Obama loan modification plan. Mortgage borrowers in financial distress may qualify for a lower mortgage payments via this federal program. This could be a worthy option if you cannot refinance your bad loan or sell your home in the current market. A Wells Fargo loan modification does not require any particular credit score, nor does it require that you have any equity in your home. In fact, under the federal guidelines for less equity you have, the more likely it is that you will get a more affordable loan payment. Mortgage delinquency is not a requirement for this program. However, if you are currently delinquent, that will not hurt your chances. Below are the basic requirements and terms of the Obama loan modification program.
You’ll need to demonstrate a change in your financial situation, resulting in your current mortgage payment no longer being affordable. There are many qualifying reasons, such as a rate increase on an adjustable loan; a reduction in income or loss of employment; unforeseen medical expenses; separation or divorce; or military service. You need to submit a financial hardship letter describing the current situation, then submit this, along with your application and other paperwork. A successful hardship letter contains some critical elements, but it is not that difficult to write. Just be sure that you cover your situation, completely and succinctly, to stand the best chance of gaining your bank officer’s empathy and cooperation.
You must also prove that your income is enough to cover your current debt load as well as the new lower monthly payment. Clearly, if the bank lowers your mortgage payment, they want to be certain that you will not get into financial trouble again. to assure your lender of this, you need to submit a budget, or financial statement, setting out in detail. Your income and expenses. Exclude all luxury items or unnecessary expenses from this statement. Wells Fargo needs to be assured that you are doing everything you can to keep your home, and that home ownership is your top priority.
Depending on which federal program to qualify for, the terms of a loan modification will vary. Currently, the most aggressive option is called Home Affordable. This option is available for homeowners who meet specific guidelines, which you should learn about on your own before you approach Wells Fargo. If you qualify, this loan modification program offers interest rates reduced to as little as 2%, and loan turns extended for as long as 40 years. The Treasury Department is paying the lending banks incentives for approving homeowner loans that are successfully modified, so as long as you qualify under the limitations of Home Affordable, you stand a good chance of approval, as the lenders are motivated. Just be sure to do your homework before you approach your bank.
Keep your home by ensuring that you are prepared and ready to deal with Wells Fargo. When you go into apply for your Wells Fargo loan modification, be sure you complete your paperwork properly and know what to say to the lending officer. Even qualified borrowers can be refused for this program if they make mistakes. However, should not have to pay high fees to an attorney or other middleman company. In fact, the government discourages this. Guidelines are not that difficult to follow — just be sure to (a) take your time, (b) ask any questions you may have before you approach Wells Fargo, (c) complete the forms entirely, and (d) have your supporting paperwork in order. Understand the basics, so that it is as easy as possible for your lender to approve your application, and you stand a good chance to get the help you need.