Common Elements of a Mortgage Modification Hardship Letter

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One of the most important documents in the mortgage loan modification process is a well-written hardship letter that will increase your chances of getting a loan modification. You need to convince your lender that although you are truly suffering a hardship, you still want to keep your home and make your payments. While details of your hardship letter will depend on your own personal situation, below are some basic elements of the hardship letter.

Before you even begin writing the hardship letter, gather all the records that you will need to prove your hardship claim. Examples of required documents include pay stubs, bank statements, monthly expense reports, divorce papers, death certificate, medical bills, credit card statements and tax returns. The hardship letter must include specific details about your hardship, as well as documentation, to enable your lender to verify your hardship claims. If you are using a do it yourself loan modification kit, the kit includes worksheets to assist you in figuring out your financial income, expenses, debt and helps to keep track of all your financial documents. If you have retained a third party company to assist you through the application process, a customer service representative will guide you through the documentation phase.

At the top of your hardship letter, include your name, contact information and loan account number so your lender knows who is requesting the loan modification. Indicate that the hardship letter is a supplement to your loan modification application.

Be clear and concise with your words. Your lender has probably received hundreds—if not thousands—of hardship letters. You are not alone in the foreclosure zone and the lender does not want to read another long story about your personal problems. Therefore, stick to the facts. You should state financial facts, not lengthy complaints and explanations. Limit personal details about your divorce. Always use a polite and courteous tone throughout the hardship letter. Never sound angry.

Specifically set forth why you need a mortgage loan modification with a clear description of your hardship situation. Common acceptable hardship situations may include loss of job/unemployment/reduced income/failed business; disability/illness/death in the family; separation/divorce; medical bills; adjustable rate reset issues; increased expenses; military duty; or other applicable reasons. When describing your hardship situation, stress the fact that before the circumstances of your hardship changed your life, you were meeting your debt obligations in a timely manner.

Next, you will need to explain the efforts you are taking to eliminate the hardship. Examples include cutting your monthly expenses, working part-time and forgoing vacations. This shows your lender that you are willing to make sacrifices to keep your home and pay your mortgage. You also need to convince the lender that you can continue to make payments after the loan modification. One way to do this is by pointing out your previous good repayment records and submitting a budget plan that you intend to follow.

Don’t forget that you must show the lender that you want to prevent a foreclosure and stay in your home. The lender is more likely to invest in a borrower who will remain in the home for the long term. So don’t state in your hardship letter that you plan to sell your home at any point in the future. Emphasize your ties to the community and your desire to remain in your community.

You have this one opportunity to convince your lender that you are worthy of a loan modification, that you want to keep your home and that you have set into play financial changes and sacrifices necessary to hold on to your home and avoid foreclosure. Prepare your application package with the utmost care. Take time to construct the hardship letter, including the points set forth above, as it is the pièce de résistance of your application package. Support your hardship letter with the appropriate and requisite documentation. While there is never a guarantee that a loan modification will be approved, wrapping up a complete application package with a clear and concise hardship letter supported by financial records and a future plan goes a long way toward lender approval.

Article Source: http://depositarticles.com/

Hit by the government changes to Loan Modifications,LoanModStarterKit is offering advice and help for homeowners hit by the changing regulations in the Loan Mod World. www.loanmodstarterkit.com

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