For submitting loan modification application, your vital document to be submitted is the Loan Mod Letter or better known as the Hardship Letter. These hardship letters are very important as they will tell the lender why you had gotten into difficulty paying your monthly dues. Therefore they should present a clear picture of your current financial status.

This letter can provide you an opportunity to inform your lender about the situation of your difficulties as well as the steps you have been taking to deal with them.  Make sure your reasons fall within the “acceptable hardship” list and will guarantee the lender that if given the chance to adjust your monthly dues, the home loan payments will be made on time from then on.

Some of the acceptable hardships from the lender’s point are listed below:

1. Loss of job or reduction in overall income
2. Death of the homeowner, spouse or family member causing additional expenses
3. Illness in the family causing unpredicted expenses
4. Divorce or separation
5. Forced job relocation by employer
6. Variable rate reset-payment shock
7.  Increasing expenses (on basic necessities)

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Earlier this week a press release has been issued by the U.S. Treasury Department saying that under the Making Homes Affordable Program 500,000 mortgage loans have been modified.

Mortgage loan modification goal

In July of 2009 the 500,000 mortgage loan modification goal was set and it was achieved ahead of the November 1, 2009 goal date.

Lower current mortgage rates

Lower current mortgage rates have also helped the process along by making it easier to modify home mortgage loans due to the reason that the monthly payment costs are lower along with the governments push to have mortgage loans modified.

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According to first report by Obama administration, the firms implementing $75 billion mortgage modification program have shown a slow and uneven performance.

It has been confirmed by the  Obama administration’s first progress report on its foreclosure prevention plan that it is off to a slow start.

As said by the treasury department on Tuesday, so far, just 9% of delinquent borrowers are in trial modifications. This has translated into 235,247 loans that have been at least two months delinquent.

At the start of the program it has been said by the Obama administration it is on pace to help up to four million homeowners over the next three years. This plan has been announced in February and the first institutions that had joined it started accepting applications in April.

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