If you are one of the many homeowners who are looking into modifying your Countrywide home loan, you are probably wondering exactly what you need to do. Here you will find the guidelines you need to follow to apply for a loan modification. A loan modification can help you avoid foreclosure by resetting the monthly payment amount on your mortgage.

Before you meet with a Countrywide representative you will need to prepare your application. It’s a good idea to understand exactly what you need to do before you apply. No doubt you remember getting your mortgage in the first place. You had to provide extensive documentation of your finances in order to obtain the loan. It is a similar situation with a loan modification. Lenders have strict guidelines about who qualifies for a modification. They also have firm requirements as far as paperwork proving who meets those guidelines. Even if you have a third party helping guide you through the process of obtaining a loan modification, it is still in your best interest to understand what the papers are all about and what the lender is looking for. After all, it’s your home and your credit.

It pays to be informed. The lender will want to see documentation that completely outlines your current financial situation. The first thing you will have to prove is your income. Then you will need to show something that outlines your expenses, including other debts. If you have experienced some kind of a hardship, such as a medical situation, you will need to present proof of that. This is known as a hardship letter, which explains exactly what happened. Any additional documentation that applies to the special situation should be attached to the letter.

It may seem like a lot of work to get all of this together, and to tell the truth, it is. The idea behind presenting all of this is to show the lender a picture of where you are right now and how it would be of mutual benefit to modify your loan. Under the current federal program, lenders do receive a financial incentive to offer loan modifications. Also, the lender would rather keep a good mortgage than have to foreclose and then own a house and have to liquidate it somehow. Lenders as a general rule would prefer to stay out of the home owning business.

By understanding the Countrywide loan modification program approval guidelines you will increase your chances of making a successful application for a loan modification and so be able to keep your home and good credit.