Wells Fargo is one of the most well known American banks. It is no surprise then that they are participating in the federal stimulus package and helping homeowners stay out of foreclosure and possible bankruptcy. You can now apply to Wells Fargo for a loan modification.

If your mortgage currently exceeds your home market value by at least 105% or if you have fallen behind on your loan payments you may qualify for federal assistance. This is what you need to know:

Depending on your unique situations, Wells Fargo offers a variety of programs through the federal stimulus package. These include: loan modification, extending the loan terms, short sale, obtaining a FHA loan claim or transferring your deed to Wells Fargo instead of losing your home in a foreclosure.

One key component of your application to Wells Fargo is a hardship letter. Your letter must explain fully why you are in financial hardship and what your plan is to maintain your new lower monthly loan payments after a loan modification. This letter is crucial and do not overlook it because you only get one chance to apply to the program.

Things you will need to submit with your application: why you are having financial hardship, your current loan terms and conditions, a detailed list of your current income and expenses, and a debt-to-income ratio.

It is also important to do your own research ahead of time and to be familiar with the different programs and options. This can show the bank that you are serious about getting back on the financial track.

Finanlly, you will only qualify if your mortgage value is 105% of your current home's market value and it must be owned by Fannie Mae or Freddie Mac. After a loan modifciation, your monthly loan payments will not exceed 31% of your gross monthly income.