Tips for getting a mortgage loan modification

Highlights

• Getting a loan modification is difficult, but not impossible.
• Homeowners need to submit full documentation and be persistent.
• A housing counselor can explain the modification rules and terms.

Getting a mortgage loan modification might seem like a quest only a mythic hero could achieve. After all, the ranks of those who've lost homes in foreclosure dwarf the number of homeowners who've received mortgage help.

Meet Lisa Langlois, mythic hero.

Langlois, a single mom, actress and homeowner in Santa Monica, Calif., suffered "a series of unfortunate events that all happened clustered together."

First, she was served with divorce papers. Then she was loaded with medical bills, despite having two health insurance policies, after an SUV struck her son.

Caught in a financial undertow, she turned for help to the nonprofit Los Angeles Neighborhood Housing Services. The organization eventually helped get her home loan modified.

The seemingly mysterious nature of who qualifies for a loan modification is legendary among housing counselors. But these experts say there are ways homeowners can better their chances.

Following are housing counselors' tips for getting a mortgage loan modification:

• Complete the package. Homeowners need to submit paycheck stubs, a hardship letter, a budget and any other documents the loan servicer wants. If even one document is missing or outdated, the entire file will drop to the bottom of the pile.
• Ask questions. Make sure you know exactly what to provide to servicers. Servicers often request two paycheck stubs on the assumption that two paychecks represent one month's income. But a homeowner who is paid weekly, bimonthly or monthly may have to submit more or fewer paycheck documents. Similar misunderstandings about other documents can be equally problematic.
• Stay in touch. Homeowners should call the servicer at least once a week and check on the status of his od her request. Ask whether the file is complete. Review the documents. Explain any special or changed circumstances. A counselor can help, but lenders also want to hear from the homeowner on a consistent basis, says Richard Korn, a foreclosure intervention and default counselor at Apprisen Financial Advocates in Columbus, Ohio.