Basic Information about Washington Mutual Bank Loan Modification

Due to the mortgage meltdown and the troubled economy, a lot of homeowners are really anxious. Their income is decreasing due to household layoffs and pay cuts, but their monthly mortgage payments are staying high as ever. If monthly payments reach a certain percentage of the gross monthly income, it just isn’t feasible to pay anymore. If that’s your situation, you have to find out more about Washington Mutual Bank loan modification.

Only those with mortgages originating from Washington Mutual can get a Washington Mutual modification. The bank will generally only grant modifications to first mortgages (that means no previous modifications or refinances) and houses where the applicant resides. Washington Mutual has a lot of options for alternative payment plans and short sales to prevent foreclosure, but in general loan modification is one of the best avenues.

If you want loan modification through Washington Mutual, you should first find a licensed financial counselor. If someone suggests that you can contact your lender directly then they don’t know what they’re talking about. A financial counseling firm will represent you and make sure your voice is heard. Your bank may overlook some aspects of your situation, or might not give you the full attention that your case deserves. Having representation, particularly legal representation, guarantees that you will get it.

Via your financial counselor, you’ll write and send a hardship letter to your lender. This letter outlines your financial situation and explains why you need a modification. Keep it to within a few pages so you don’t overwhelm the loss mitigation specialist at the bank, and keep it professional and to the point. Make a point of saying that you are committed to staying in your house and avoiding foreclosure. Your letter should demonstrate that you are trustworthy.

Along with your hardship letter, you will also submit your financial information to your lender. Information like income verification (tax returns and pay stubs), bills, and statements will be used to see if you fit the modification criteria.

If your loan is backed by Freddie Mac or Fannie Mae, then you may have a second alternative for loan modification. In March 2009 the President created the Making Home Affordable plan to help 4 to 5 million homeowners obtain lower monthly payments through loan modification. With the backing of $75 billion in taxpayer dollars, the government plan offers financial incentives for on-time payments and generally gets people lower interest rates on their modified loans.

For additional information about home loan modifications.