Writing a loan modification hardship letter

Mortgage Late Payment Remedies Hardship Request Due to Unemployment If you are struggling to keep up with mortgage payments due to losing your job, applying for a mortgage modification may be in your best interest. This sample letter provides a modification request based on income loss resulting from unemployment.

Writing a loan modification hardship letter

This letter acts much like an outline or biography of your current issues that are affecting your ability to meet your financial obligations, and by this we mean not being able to afford your mortgage.

Lenders do look for what is known as a hardship letter when a borrower applies for a loan modification. Rather, the purpose of the hardship letter is to explain upfront, in simple language, why borrowers missed payments, and what they propose as a solution.

And there is always the risk that borrowers who go on at length could unknowingly trip themselves up with unnecessary details that raise red flags for a mitigator. When the housing bubble burst, home values dropped, and millions of homeowners who did the right and responsible thing—shopped for a home, secured a mortgage, and made their payments on time each month—were left with houses worth less than they paid for them and mortgages worth more than their homes.

writing a loan modification hardship letter

Today, many of these homeowners are locked out of refinancing because they are underwater. The hardship letter should open with a succinct explanation of why the borrower stopped paying the mortgage. The letter should cite a reasonable specific hardship, like a lost job, illness or reduced income.

Next, the letter should briefly cite any steps the borrowers took to avoid defaulting on their loan, like cutting household expenses or tapping into savings.

Finally, the letter should state exactly what borrowers are applying for. Is their proposed solution a lower interest rate, for example, or a principal reduction? Borrowers who are underwater that is, owe more on their mortgage than their property is worth may ask their lender to consider a short sale, in which the house is sold to another buyer for less than the amount owed.

The fact that a home has lost considerable value should not be cited as the sole hardship.

Hardship Letter for Loan Modification - Get Foreclosure Defense

One of the items your lender or servicer will ask for during the loan modification process is a hardship letter.The letter should be professional, and you will find that Hardship Letter Samples will help with that.

If you would like to make a short sale in regard to your home rather than be foreclosed, you can explain that through the help that is found in Hardship Letter Samples.

1. Contact your lender asking for the loan modification department.

Find Our Best Mortgage Rates

Request the name, address and telephone number of the asset manager assigned to your case. If your loan is a mortgage, talk to a housing counselor first, because a hardship letter may not be necessary for a loan modification or other relief.

Don’t go it alone! We’re ready to offer expert advice and assistance, no matter what your current debt situation is. Oct 03,  · Example Hardship Letter One of the items your lender or servicer will ask for during the loan workout or loan modification process is a hardship letter. A hardship letter is a written explanation as to what has caused you to fall behind on your mortgage and it vital in helping you stop foreclosure.

Subject: Find a Loan modification letter / hardship letter Mon Jan 26, am If you have a financial problem and are unable to make timely payments on the debt as per the terms and conditions of the loan agreement, you can send a loan modification letter to the creditor.

Hardship Letter Examples The following two letters below are examples of hardship letters that can be used for loan modification, Short Sale and Deed in Lieu of Foreclosure. Just tweak it to make it applicable to your situation.

Perfecting Your Hardship Letter | Personal finance