High School physics to the rescue! Let me tell you how inertia…in this case, file inertia…can help you get a mortgage modification.

I coined this term to help my readers understand a basic tenant of mortgage modification reality. O.K., so it’s not a scientific breakthrough. It can still be important, right?

Applications (files) that are moving tend to remain moving. Files once stopped, tend to stay that way. It seems like a “blinding glimpse of the obvious”, no?

Here’s how it can help you to win a mortgage modification and improve your family’s budget. There is a force acting upon all modification applications that tends to stop them. It’s called overwhelmed. The banks are still overwhelmed with the sheer number of applications. All systems and processes are strained to the breaking point so it is logical for them to “stop, reject or send back for updates and corrections”, as many files per day as possible. This “rework” gets the file off their desks and onto someone else’s. AND, it becomes your problem, not the bank’s. You can’t let that happen to yours! Here’s what to do about it.

Make you application perfect. Not only do you need to provide all the required info, that’s just table stakes. To play to win, you must also organize it and present it in a way that is perfectly understandable to an inexperienced, barely trained bank employee. Missing documents, unsigned tax returns, expired 4506-T and insufficient income verification make your application an easy mark for rework.

8 Tips to get file inertia on your side:

1. Document Income correctly and show it clearly. This includes, notarizing self-employed P&L, including annual award letters for SSI and EDD income, showing calculations for monthly gross amounts and explaining precisely how you calculated recent 1099 income.

2. Show rental property correctly. This is especially important if you are applying for a HAMP modification on your primary residence.

3. Be sure your front-end DTI (Debt-to-Income) is right. Total monthly payments on the 1st mortgage divided by gross household income must be greater than 31%.

4. Your back-end DTI (total indebtedness as percent of gross household income) must be less than 70%. If it is higher, you will get rejected for having too much debt.

5. Get a copy of your credit report. Make sure you have included on your budget, all current debts that show-up. That’s not to say you have to list them as current monthly debt payments, just be sure all of them are dealt with in your application.

6. Bottom line of your budget…after income taxes, debt payments and costs-of-living…you should have $0 remaining.

7. T get serious consideration for a mod you must be late. In fact most banks do not start to evaluate your application until you are late. Oh, sure, they “handle” your applicationa and they say all the right things, but you won’t get a mod offer until you go late.

8. Put the whole application together as if you were there presenting it in person. Include a cover letter, a table of contents and notes to clarify anything that is not blatantly obvious (actually, even make notes expaining those things!).

If you take these 8 tips seriously you will get file inertia working for you. It can be one piece of high scool physics that really pays off for you.

Need more “insider tips” to get Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification This article, 8 Ways To Improve Your Mortgage Modification Application is released under a creative commons attribution licence.