Loan Modification Documentation Checklist

Once you’ve decided you’re ready to apply for a loan modification, you may be wondering what sort of documentation is required to start and complete the process. The simple fact of the matter is this… applying for a loan modification is similar to applying for a loan – your lender wants to see a short stack of documents proving your need for a loan modification and your ability to afford any lower monthly mortgage payment that may result from the loan modification.

Most lenders require that you submit the following documents:

  • Hardship letter describing the event(s) that triggered your inability to make your mortgage payments.
  • Copy of any documentation supporting your hardship claim, such as hospital bills, a pink slip from your work, or divorce papers.
  • Borrower information sheet (sometimes referred to as a financial worksheet) showing your income and assets, similar to the Uniform Residential Loan Application – 1003 you completed when applying for your loan.
  • Copy of past two years’ federal income tax returns.
  • Copy of past two years’ W-2 forms.
  • Copy of past two months’ bank statements. (If you have a pile of money sitting in the bank, the lender is less likely to grant you a loan modification based on hardship.)
  • Copy of past two months’ pay stubs showing income from your job.
  • Copy of most recent mortgage statement.
  • Copy of most recent property tax statement (if escrow payments for property taxes are not shown on your mortgage statement).
  • Proof of homeowners’ insurance (if escrow payments for homeowner’s insurance are not shown on your mortgage statement). Your insurance agent should be able to provide you with what you need.
  • Current financial statement (sometimes referred to as a financial worksheet) detailing your monthly income and expenses and showing how much you are coming up short each month with the current house payment.
  • Projected financial statement detailing any changes to your monthly income and expenses and the payment amount you will be able to afford assuming you obtain a loan modification.
  • Any letters from credit counselors demonstrating your commitment to getting your financial house in order and what you are currently doing to achieve that goal.
  • Cover letter or form explaining why you’re submitting all these documents and providing a list of all documents included in the package. Make sure the cover letter includes your name and account number.

Prior to submitting your application, make sure you have signed all documents that require signatures. Your significant other may need to sign, as well, assuming his or her name is on the original mortgage. You may also want to include your loan number on copies of all documents in the package.

Keep in mind that you may get only one shot at having your application approved, so make absolutely sure you follow your lender’s instructions to the letter and include each and every document the lender requests in whatever form specified.

Ralph R. Roberts, GRI, CRS
Award-Winning REALTOR® and Author
Loan Modification For Dummies (avail. Summer 2009)


  1. thank you for the information everything was very helpful to me

  2. Alicia Love Says:

    In your article “Loan Modification Do’s and Don’ts”, #2 you stated “Don’t assume it’s too late to act: As long as you are still residing in your home, you have opportunities to keep your home”. Is this applicable to one who has received a notice of foreclosure (or NOD)?

    Or the following scenario may be more precise on what I am asking advice on: If one has received a notice of foreclosure (NOD) and is OVER 3 months behind on mortgage payments; yet has NOT received a notice of sale (NOS) and is still residing in the home, does one qualify for a loan modification?

    If a loan moficiation is not possible, what would you suggest is the next reasonable step for a homeowner?

    Thank you,
    Alicia from Orange County, CA

  3. Dear Alicia,

    First let me say for the benefit of all reading this response… foreclosure laws vary by state and if you find yourself facing a foreclosure you should educate yourself on the laws and, even better, consult an attorney knowledgeable with your state’s foreclosure procedure. That advice goes for you too, Alicia. Okay, here goes.

    Yes a loan modification is still possible. That however somewhat depends on your lender’s willingness to work with you after a Notice of Foreclosure (NOD). The good thing is you’ve not received a Notice of Sale (NOS), but you need to act quickly.

    Being 3 months behind doesn’t disqualify you from a loan modification, and in fact it might make you a better candidate. If you can afford to make a monthly payment, albeit a reduced one, your lender might be willing to stop the foreclosure action and modify your loan.

    Believe it or not, the lender does not want to foreclose and take your house. They really want you to pay, so if they can get you to pay an amount that is less but reasonable, they might go for it. What you need to do — IMMEDIATELY — is contact your lender or have your attorney or loan modification representative contact them.

    Now I’m not an attorney, but if I understand California’s foreclosure laws correctly, with a non-judicial sale, which it sounds like your situation is, you are given 90-days to cure the default once the lender records the NOD. That means you have to act quickly. If you don’t cure with the 90-days, your lender will record a NOS and will have the right to sell the property at public auction within 21 days after filing the NOS.

    Start making contact with your lender and request a loan modification package. You’ll have to fill out financials and prove a hardship, but if you can afford a payment, there’s nothing that says your lender has to follow through with the foreclosure. But, they will for sure follow through with the foreclosure if you do nothing!

    Ralph R. Roberts

  4. Josh Says:

    Loan modifications really work!! Listen to this, I have an investment property in which i had never been late on but the rate was 6.25% 3 year ARM and it was due to adjust. Everyone i spoke to spoke to said nope, no way, never!! They said ii needed to be late on the payment and it could not be an investement. Guess what!! I got it modified to a 5% 30 year fixed!! Well truth be told it wasnt really me doing all the work, i used Home Mitigation Direct. Either way it it actually works, and it only cost me $499.00. Soooooo Happy!!!!!!



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