If you are struggling with your mortgage and facing default, you may be eligible for an HSBC loan modification to lower your monthly payment. However, not every homeowner will qualify for assistance, so it is important to understand what programs and options this large, international bank offers and also what it takes to get approved for help.
Unfortunately, HSBC does not participate in any of the government loan modification plans, but they do offer several loan workout programs to help qualified borrowers. These in-house programs closely mimic the basic guidelines for approval that the federal programs follow-with slight variations. Here is a quick list of qualifying tips to help you begin:
- Financial Hardship: you will be asked to provide a brief explanation of the reason you can no longer afford your mortgage payment-this is called a Hardship Letter. The acceptable reasons include: loss or reduction of income, increased monthly expenses, high monthly debts, lack of savings or reserves. Keep in mind that loss of equity alone is not a valid reason, although it is a mitigating factor in the decision made by the lender. Keep your Hardship letter to one page if possible, be sure to sign it and write your loan number on the top.
- Monthly Gross Household Income: How much income you report on the loan mod application can make or break your chances of approval. HSBC uses a standard mathematical formula to modify loans-you must be able to pass
this formula and the amount of gross income you report is the key component of this approval formula. If you report too much or too little income, you will FAIL the formula. You can include non borrower contributions, including room mates and rental income. Learn exactly how much income you need to pass the HSBC approval guidelines-use the Loan Mod Calculator to automatically compute and display your specific income requirements.
- Monthly Household Expenses: You will need to list all of your expenses-items like groceries, utilities, car payments, insurance, etc will help HSBC to determine your financial situation and verify that your monthly cash flow pass the guidelines. Ideally, your expenses should show that you are barely making ends meet now or even have a negative at the end of the month, but must also show that AFTER the mod you will have at least $250 left over for emergencies. This can be tricky to accomplish-use the Loan Mod Calculator to compute and display how to list your monthly expenses to pass this guideline.
- Waterfall Mod Formula: HSBC will use a combination of terms to arrive at your new monthly mortgage payment-including lowering the interest rate, increasing the loan term and even reducing your loan balance. They use the Waterfall method to determine what new terms will be required to achieve your new monthly payment-you can find out if you PASS the Waterfall and what your new payment could be-use the Loan Mod Calculator to show you this important formula and show you how to make certain you do not FAIL this part of the HSBC loan mod program.
There are options and programs available for qualified homeowners-but HSBC will only approve those borrowers who can prove that their monthly income, expenses and assets all pass the strict guidelines. Make sure that you take the time to learn how to apply correctly so that you have the very best shot at approval. Visit MyLoanModificationCenter.com today for more information and tips.