Times remain tough. And for most families, their home is the single most important asset. Many homeowners have applied for modifications in order to lower their monthly mortgage payments. In the process, many have been able to not only lower their mortgage payment amount, but also their interest rate.

The various news outlets have all reported the long amount of time homeowners wait to find out about if their modification has been approved. Ask anyone who has applied and they will tell you all sorts of stories about missing paperwork, lost paperwork, outdated paperwork, and the amount of time (months, if not a year or more) they have had to wait to hear from their mortgage company.  Saddled with complaints from consumers about the length of time and the handling of their mortgage modification applications, the Treasury Department has taken the mortgage servicers back to school.  The Department now grades each servicer based on how they evaluate and approve the modification loans.  For example, the June 2012 report (the most recent available at the time of this posting) shows how many applications have been received by each servicer, how many have been processed, approved, or denied.  The most recent summary results for the overall HAMP program as well as individual servicers can also be viewed (May 2012 is the most recent report).  Check to see how your servicer is doing.

With all that said, before applying for a loan modification, there are a few documents that you will most likely need to send with your loan modification application: 2 of the most recent bank statements (from all bank accounts) (include all pages of the statements), current property tax valuation, homeowners insurance policy declaration page, 2 of the most recent paystubs (showing YTD earnings) for each borrower, and proof of income from Social Security or other government benefit (such as VA benefits, Railroad retirement, etc.), and complete and sign Form 4506T (to request income tax transcripts from the IRS). You must also complete the mortgage company’s Request for Mortgage Assistance (RMA) form. There may be other documents that will be required for you to send in with the original RMA, so you must check with your mortgage company or review the information on their website. For example, Chase has the information posted on its website for you to print and return to it.  So it is important that you check with your respective Mortgage Company to make sure that you provide the information initially.  Failure to do so will likely result in delays in processing the application for assistance.