mortgage

New home loan modification rules coming

Documents you'll need to send before you can get a trial modification
Request for Modification and Affidavit form (called the RMA)
  • This document contains basic financial information, as well as a description of the cause of the financial hardship. It must be signed.
IRS Form 4506-T or 4506T-EZ
  • This form authorizes the mortgage servicer to request a transcript of the most recent federal income tax return. The form must be signed. Don't expect the authorization to go unused; the servicer is required to get the tax return transcript.
Evidence of income
  • Most borrowers will be required to submit two recent pay stubs that indicate year-to-date earnings.
  • Servicers may make adjustments when they deem it unlikely that commissions and bonuses are unlikely to continue.
  • Self-employed borrowers will be asked to submit the most recent quarterly or year-to-date profit and loss statement. It doesn't have to be an audited financial statement.
  • People with other types of earned income -- tips, overtime, bonuses, commissions, fees, housing allowances -- will be required to submit "reliable third-party documentation."
  • For benefit income -- Social Security, pension, welfare, disability or death benefits -- the borrower needs to submit a benefits statement of some type, along with receipt of payment, such as copies of the two most recent bank statements.
  • People drawing unemployment benefits are eligible, in some cases, for modifications. They will need a monetary determination letter or other evidence of the amount, duration and frequency of benefits.
  • Rental income is included in Schedule E of the income tax return. In the absence of an up-to-date Schedule E, the borrower can submit a current lease agreement and canceled rent checks.
  • Borrowers aren't required to include income from alimony, separation maintenance or child support. But they can include such income if they wish. It has to be documented with court papers and bank statements.

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