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5 Common Mistakes To Avoid During A Loan Modification Application

By Ruth Racey
Published: Monday, November 16th, 2009

Applying for a loan modification is very important to those consumers facing financial difficulties. If you are applying, it is essential not to mess things up because this might be your last opportunity of regaining stability in your finances. Here are five of the most common mistakes consumers do before and during loan application.

  1. Failure to understand the requirements the lender is looking for. 
    Talking to a lender and submitting papers without knowing and understanding their criteria for qualification might only give you a small chance of getting your loan modification. It is best to ask reliable sources such as family members and friends in order to assess yourself whether you are qualified or still need to prepare additional documents. 
  2. Wasting time talking to other collection agencies and departments. 
    When your lender begins to demand for payments the first person to meet and speak with is your loss mitigation counselor. The loss mitigation counselor is the only one who can inform you of the right steps in finishing your application.
  3. Avoiding contacting banks. 
    Because you are applying for a service that has something to do with money, you will eventually need to talk to your bank in order to process your loan. Do not be afraid or get intimidated by your bank because their help will be necessary in finding the right modification you want. They will willingly offer their aid because after all you are a client, and a client, for them, means money. Banks nowadays do not anticipate you to face delinquency at the moment, but maybe some two or three years from now. 
  4. Submitting an unattainable and unrealistic loan proposal. 
    Planning a proposal for the loan modification should be well contemplated. Giving them an impossible application would not only describe yourself as that kind of client, you might also actually lose your chance of getting approved. Although it seems difficult, work on a plan that would benefit both you and the lender or provider. 
  5. Failure to include all necessary information in the application. 
    You should take into consideration that your lender would review all the information that you have supplied because those will be their basis for approving your application. The bank would also evaluate these documents, so leaving out something can cost you a potential loan.

Make sure you avoid these mistakes before submitting or continuing your application. This may indeed take up a lot of time, but after this you will be assured of your loan modification and a better financial condition for you and your family.

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