Getting a First Horizon Loan Modification

First Horizon is one of the most established financial servicers in the United States, having been established in 1834 and playing a big role in the recent sub-prime mortgage boom. Today, it is also among the most active providers of loan modification, a process that allows struggling homeowners to get more comfortable mortgage terms. If you're looking to get a First Horizon loan modification, read on for a simple borrower's guide.

Qualifications
As with any other lender, the main requirement for a First Horizon loan modification is a valid hardship that justifies the borrower's falling behind. A borrower may apply for loan modification without being in default, as long as he or she can prove difficulty in meeting monthly payments. Adjustable-rate or high-rate mortgages are good candidates for loan modification. Other parameters include:

-a stable income
-ability to afford the reduced rates
-clear bankruptcy record (i.e. the home should not be in bankruptcy)

Hardship letter
One of the first things the lender will require is a hardship letter, wherein you explain the nature of your hardship and justify your loan modification request. Valid reasons include medical emergencies, job loss or income loss, divorce, or a death in the family. Make sure to keep your letter factual and simple--agents go through thousands of letters a day and lengthy texts are likely to be pushed to the back.

When should one apply?
The simple answer is as soon as possible. Most people who need loan modification are already in danger of foreclosure, so time is of the essence. As soon as you miss a payment or foresee financial difficulty, you can call up the bank and start comparing your options. Remember, thousands of other borrowers are seeking a First Horizon loan modification, so the earlier you get started, the faster you can get back on track.

How are loans modified?
A First Horizon loan modification can come in any of several forms, depending on what makes the most financial sense. The most common types are:

-reduction of interest rate;
-change from an adjustable-rate to a 30-year fixed-rate mortgage;
-extension of loan terms;
-distributing late payments and penalties to monthly payments; and
-direct reduction on the principal (usually offered on homes with negative equity).

If the borrower doesn't qualify for loan modification, he or she can also look into other solutions that can minimize the damage or avoid foreclosure. One of the most common alternatives is a short sale, where the home is sold for less than the value owed and the proceeds paid to the bank as full payment. Consider working with a loan modification attorney to increase your chances of approval and learn more about your loss mitigation options.