Home Loan Modification Questions: What Is a Hardship Situation?

If you are considering a home loan modification, there is a list of criteria you must meet in order to achieve lender approval. To many applicants, one of the most confusing phrases is “hardship situation.” Clearly, anyone who is seeking a home loan modification is in some kind of hardship situation, so why even ask?

Lenders closely review all of the circumstances provided by the homeowner in order to determine whether their circumstances meet their definition of hardship. Here are conditions that do – and don’t – qualify.

Hardship: The death of a spouse.

The sudden or lingering death of a spouse meets the criteria for hardship, as many families rely upon two incomes in order to meet their financial obligations.

Non-Hardship: Supporting extended family with expenses.

If you have gotten into a financial hole by extending gifts of money to family members, while you do qualify as being generous and compassionate, unfortunately you do not qualify as suffering a hardship.

Hardship: Being laid off.

Going to work and finding the business shuttered was a disturbingly common occurrence during the financial crisis at the end of the previous decade. Losing your job due to a layoff or another unforeseeable reason may meet the criteria for hardship.

Non-Hardship: Voluntary unemployment

If the circumstances of your unemployment render you ineligible for jobless benefits, chances are high you will be ineligible for loan modification, too.

Hardship: Illness or disability.

If you or a family member suffer or have suffered from a serious illness that caused disability, inability to work, and/or unmanageable medical expenses, you may qualify as suffering a hardship.

Non-Hardship: Illness of a pet.

If your pet has suffered an illness that led to extensive care and significant veterinary bills, that will not be considered a credible hardship circumstance on its own. However, if you suffer from a disability for which you use a service animal in order to live independently and that animal falls ill or injured, you may include those events in your hardship letter to illustrate the urgency of your need. Nevertheless, it cannot be the primary reason for your hardship.

Hardship: Divorce or abandonment.

If your marriage dissolves, leaving you in reduced circumstances and unable to maintain your expenses, this may qualify as a hardship.

Non-Hardship: Living beyond your means.

A lavish lifestyle you are not able to afford – credit card debt, boats, vacation homes or other luxuries – are certainly a drain, but are not considered a credible hardship. Unfortunately, neither are student loans and college tuition.

The team at Golden State Financial assists thousands of clients throughout the home loan modification process, successfully reducing interest and other repayment terms and helping avoid foreclosure. For more information about loan modification processes, contact: 949-233-9180

HAMP Modifications Are Over, But We Can Still Help You Modify Your Loan

December of 2016 marked the end of the Home Affordable Modification Program (HAMP), as well as most offerings of new assistance under the federal Making Homes Affordable program (though HARP will not expire until December of 2018). However, while federal assistance my no longer be available to you, many of the eligibility standards set forth by HAMP are still in force for many loan modification service agents. Here is more good news: Approval and decline decisions will likely be considerably faster than they were for HAMP applications, and the documentation gathering process is considerably less complex for many service providers. HAMP modifications may be at an end, but your loan modification process may actually be easier than ever!

Loan modifications: What you need to know.

Loan modification standards vary across providers. However, because many programs adhere to qualifiers similar to HAMP criteria, here are a few details that will be required.

• The appropriate application form. The required forms for home loan modification differ depending upon your lender. If you have a Freddie Mac loan, you will be required to submit a different set of forms than you would for Fannie Mae, or other lenders.
  
• Documentation of hardship. You must be able to prove your inability to meet your payment obligation due to extenuating circumstances, such as a major medical event, a loss of employment, the death of a spouse, a disability, or divorce/separation. This may be documented in a hardship letter, and by providing outstanding bills and payment stubs. It is very important that all of the information is factual and verifiable.
  
• Delinquency of approximately 60 days or threat of imminent default. The foreclosure process does not necessarily slow or cease during a home loan modification. It is very important that you begin researching your options once you recognize the extent of your financial hardship. If your home is already being foreclosed when you begin your loan modification process, it is possible that your home will be put up for auction by the time you receive your approval or denial.

Golden State Financial provides comprehensive loan modification consultation services, empowering clients with the information and support they need to renegotiate the terms of their home loans and keep their property. If you have questions about how a loan modification can help you keep your home, don’t hesitate to contact the experts at Golden State Financial.

Golden State Financial Group: Need a Home Loan Modification?

Your home is your likely your biggest asset. It’s also one of the most important places to you because it is where you do life. For these reasons, losing your home can deal both a financial and an emotional blow to you and your family. However, did you know it is possible to modify your home loan to overcome too-high monthly mortgage payments? It is with the help of the Golden State Financial Group.

So, what exactly is a home loan modification? It’s essentially an alteration of your home loan’s terms that reduces your payment each month to one you can easily afford. An effective way of doing this is by decreasing your loan interest rate.

Those who may need help but may be particularly at risk of not getting the assistance they need include those with bad credit, those with no equity in their homes, or those who are self-employed. However, the Golden State Financial Group has experience with working with members of these groups. The experts there can evaluate your situation in just a few minutes and tell you if you have a real opportunity to receive approval for an attractive low-fixed-rate home loan modification.

In light of skyrocketing home values, acquiring a home loan modification is more challenging now than ever before. However, it is still possible depending on your individual circumstances. For those who can take advantage of loan modification services, they can breathe a sigh of relief knowing that they won’t have to pay for these services until their modifications are approved, if they seek help from the Golden State Financial Group. That means if you cannot get approved, you don’t owe any money.

The Golden State Financial Group specializes in modifying home loans by reducing the interest rate to help homeowners to stay in their homes. Contact us at (949) 233-9180 or email us at todd@goldenstatefinancialgroup.com to see if we can modify your home loan. No matter what happens, you can’t lose, so it may be worth seeking loan modification this year so that you can keep doing life in your home in the coming years.