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How the Loan Modification Process Works

Transcript: How the Loan Modification Process Works

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If you're concerned about keeping up with your mortgage payments, we understand this can be a tough time for you. That's why we've created this and other videos to help you understand your options.

The first thing you should know is that we really DO want to help you and that you should talk with us right away. Here's how you can do that: call 1-800-678-7986 or visit

We want to work with you even if you've asked for help before, and it starts with a talk about all of the options that could help you avoid foreclosure. When you call, you'll be assigned a home preservation specialist who will be your guide through the process, will help explain your options, and will identify the documents you'll need to get to us along the way.

This person will have a lot of questions for you, but one of the first will be: Do you want to stay in your home? If the answer is yes, we'll likely discuss applying for a loan modification that changes the terms of your loan. And if you are approved, this could help you stay in your home.

If you can't stay in your home, your home preservation specialist will work with you to identify options other than foreclosure. We'll cover that in another video.

For now, let's assume that you want to stay in your home and that you've decided to apply for a loan modification. As part of the process, we'll work with you to understand the cause of your financial setback and ask you to give us information about your income and your spending, bills, and debts.

Applying for a loan modification does take some effort. You've got to supply documents, double-check forms, and meet deadlines, and it's essential that you stay on top of the process.

Some possible factors determining whether you'd qualify for a loan modification include:

  • Your circumstances, why you fell behind on your mortgage and your ability to pay in the future
  • Your monthly income and how it compares to your housing costs
  • Your property value, the amount of your equity
  • The condition of the property, and
  • Whether you live in the property or it's vacant

To start the process, you'll need to get us some information. The income documents you may need to provide include pay stubs, savings account and investment statements, Social Security statements, and tax returns.

Housing information you may be asked to provide include your current principal balance, interest rate, homeowner's association dues, homeowner's insurance costs, and real estate tax statements.

Every situation is unique and we may consider other factors as well such as whether your home is a single or multi-family home and the available programs for your current loan.

Here's how it generally works: First, you'll send us the documents we need. Then we'll review them and make a decision, usually in less than 30 days. If you qualify, you'll get a trial loan modification that generally lasts 3 months.

As long as you pay the right amount by the due date during that period and there are no changes in your circumstances, it's likely you'll be approved for a modification within 45 days after the end of that period. At that point, you'll just need to sign the documents for the modification, return them, and then you're all set.

We understand this process can sound complicated at the beginning, but if you take notes, ask questions and stay on top of it, we'll be with you every step of the way to help.

Let's start the conversation today.

Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. 
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