At one of our Loan Modification Workshops in Arizona recently, someone asked the question, “Can I still get a loan modification if I am current on my mortgage?” They went on to say that they are struggling to pay their bills due to a financial hardship, and are just hanging on by a thread.

The short answer is yes, you still may be eligible for a loan modification or refinance, either through your bank/loan servicer, or through the Making Home Affordable program. First off the lender assess less risk than with someone who is very behind on their payments. Realize though that the lender would need to understand why you would need a loan modification if you are current on your payments. From their perspective you are in good standing. Usually, a loan modification is requested by homeowners who have already fallen behind on their payments, due to a financial hardship.

According to the Making Home Affordable program announced in March 2009 by the Obama Administration, there is a provision in the plan to assist homeowners who are not yet late on their home loans.

Please realize that although this provision does exist, there will be more scrutiny placed upon such applications. This is to ensure that the program only assists people who are going through a financial hardship, and who will inevitably start having problems making their mortgage payments. Everyone likes the idea of lower payments, so those who process loan modification request have to ensure that the system is not taken advantage of, and that the necessary help is given to the right people.

Many people have reported that they have received little to no assistance from their mortgage company, when applying for loan modification while being current on their payments. If a loan servicer can see you are 4 months behind and are about to enter into foreclosure it is easier to verify financial hardship, and the loan modification process is escalated.

Our advice to those who are still current is to be prepared to provide a suitable justification as to why you need a loan modification. This would typically be due to a temporary financial hardship from something such as; losing your job, a sudden decline in income, a family illness, or other reason for higher than normal expenses.

The leander needs to see why you will soon be unable to make your payments. They must also be able to see that this will be a temporary situation that you will be able to recover from with assistance, and that you will be able to make your payments again, with the intention of staying in your home.

Proving you financial hardship, while still being current on your payments can be extremely frustrating, even with a legitimate claim. Educate yourself on the Making Home Affordable program, and if you prefer to have us review your situation, then by all means complete our simple Free Evaluation form. We will explain your options, and you can proceed to self-process you loan modification or choose to use our negotiation services, which have proved to be successful for a growing number of happy homeowners.

If you have the time to invest then this might be a long process. Some have had to contact their local media, and congress, in addition to posting the details of their experience in online public forums. Many homeowners have spent up to a year fighting to get loan assistance when they are not late on their payments.

It is in a banks best interest to work with you if your claim is legitimate, rather than initiating foreclosure proceedings. If you can prove that your current financial situation is temporary, and that it prevents you from being able to make your monthly payments, then a reduction in your monthly payment, and/or an extension of the duration of the mortgage loan would be beneficial to both parties.

What do you need?

1. A letter describing your financial hardship
2. Proof of your current income and your current finances
3. Possible proof that you are actually living in the property

The financial documentation will be used to determine if they can modify your monthly payment, to meet your specific situation. You may need to provide supporting documentation, such as current pay slips, monthly expenses, and bank statements.

It is important to you show that while you experiencing a financial hardship, you’re situation is not hopeless. If there is absolutely no way you will be able to make payments down the road, even with a significantly lowered payment, then this will not be approved. You need to show that with this lowered payment that they arrange for you, that you will be able to stay current on your payments moving forward.

Related Articles:

1. What Can I Expect If I Get Approved For A Loan Modification
2. Payment Calculator For Loan Modification Reductions
3. Do Banks Prefer Foreclosures Over Loan Modifications?