Q:

What should be included in a contribution letter for loan modification?

A:

Quick Answer

Information to include in a contribution letter for a loan modification includes how much of a contribution the debtor expects from his contributor, along with the relationship between the contributor and the debtor, Delmarva Home Relief explains. Some banks have specific requirements on the documentation to include, so debtors should contact their mortgage lender to inquire the specifics.

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Full Answer

When debtors are requesting a loan modification from their mortgage lenders, they may use income contributed by a nonborrower who resides in the home, Delmarva Home Relief notes. The bank considers the income and the debtor's qualifications to ensure the debtor's income is presented within the guidelines set by the mortgage lender when assessing the homeowner's ability to afford the potential modification of the mortgage.

Other tips to ensure the approval of the loan modification includes gathering all income documentation, tax returns, credit card statements and a list of assets with recent values, Zillow notes. A letter outlining the homeowner's hardship is also necessary. Most banks don't require that the homeowner be behind on mortgage payments to qualify for a loan modification. The homeowner needs to document that he is likely to default on payments if the lender is unable to grant his request for a loan modification.

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