Initial Reviews

• The first step in the mortgage modification process is the initial review. This is done by a lower-level worker for the lender that receives the application and scans it for basic requirements. In some cases there is a lack of information or particular financial details (such as a high income) that automatically render the application unacceptable. The initial review looks for these warning signs before passing the application along. The review process may only take a day or two, but may last longer if the lender is swamped with mortgage modifications.
  
  

Underwriting the Application

• After the modification file is reviewed it moves to an employee in charge of underwriting, or managing the general risk of the modification. This is a manager who ensures all financial information is accurate, and that what the borrower claims appears to be true based on outside sources of financial information. he contact other departments in the lending organization to ascertain mortgage information, and tries to make sure that the modification will be profitable for the lender and possible for the borrower. This step can take days, weeks or longer based on the accuracy of the borrower's information and how busy the lender is.
  
  

Negotiation

• Finally, after the underwriter process, the file is passed along to a negotiator. The negotiator deals with the file after the borrower has been approved, and decides the actual terms for the modification. The negotiator makes an offer based on the financial data that the file shows, and sends it to the borrower. The borrower can accept, reject or counter the offer, but in most cases the offer has very little wiggle room, since lenders are strict about making profits and changing the original mortgage contract.
  
  

Letters of Demand

• The entire mortgage modification process, including the time it takes the negotiator to decide on an offer, can take months. During this time the foreclosure is still progressing, which means the borrower may not have enough time to complete the modification process. In these cases, the borrower may seek the help of a foreclosure attorney, who will attach a letter of demand to the file. This letter requests that the lender make an offer by a certain deadline to avoid foreclosure. Lenders do take foreclosures into account, but if the lender is overwhelmed with modifications, control of the time frame may slip out of reach entirely.