Write a hardship letter to modify your mortgage loan.
Getting approved for a loan modification program can be difficult if you have a hardship letter.If you can write a polite and accurate hardship letter, you may be able to convince your lender to give you another chance to repay your loan.Money borrowers are unsure of what to write and how much of their story to include, which can make writing such a letter intimidating.Lawyers can usually write these letters for you, but they can be expensive for borrowers.If you follow the steps below you can easily write your own hardship letter.
Step 1: First you should explore other options.
Writing a hardship letter may not be the best solution.Do you think this is the best option for your situation?It is possible that there is an alternative that would work better for you.Refinancing an underwater mortgage through the HARP program is one way to free up money and pay the debt.
Step 2: You can contact your lender.
Speak to a representative from your lender's loss mitigation department.If you want to address your hardship letter to someone else, ask the person for their name and phone number.Clarifying the spelling of the name and the number will ensure that you have both right.The address of the lender should be asked.To write this information down, you need a pen and paper.The company you are contacting may be different from the original lender.It's a good idea to contact the company listed on the bill.
Step 3: Take your loan modification needs into account.
You need to know what to ask for in your letter.You know you can't afford your mortgage payments, but what do you want the lender to do?Do you want them to forgive your missed payments and restart with your regular payments?Do you need a lower payment for a period of time?It is possible to improve your chances of success by having a reasonable request from the lender.
Step 4: The proper heading should be on your letter.
There isn't a format for addressing your letter.It is important that your letter gets to the right place in the lender's organization and that they have enough information to access your loan information.Write your full name on your first line to make sure you include all of the required information.Go down a line and write your address on the second and third lines.Write in your lender's name, not the individual recipient.Write "Loan number:" and then your loan number.You can find this number on your loan contract.
Step 5: You should open your letter in a proper manner.
Write your greeting after your loan number.This can be either a generic "To Whom It May Concern" or a "Dear Mr./Mrs.Depending on how much you know about who is writing the letter.Before beginning the body of your letter, skip another line.
Step 6: Tell me your situation.
In the next part of your letter, mention which hardship you are suffering from and how you got there.For the purpose of loan modification, financial hardship is a decrease in income or an increase in expenses that were beyond your control.Give a brief explanation of how the situation arose.If you have more than one hardship affecting you, you should include all of them.There are different standards for what qualifies as financial hardship.Loss of income/job are valid hardships.Medical expenses due to sudden illness.There was a death on the loan.There is a divorce or separation.Military service.Legal expenses.There are changes in loan payments.An example of an invalid hardship is that you were misled in the loan agreement.
Step 7: Tell me your plans for the house.
It's best if the lender knows what your goals are.Do you want to keep the house or sell it?It is a priority if you plan to keep the house.If you're willing to do a short sale to get out of the house quickly, make sure to note that.The house should be sold at a lower price so that it will sell more quickly.
Step 8: Make a request for a loan modification.
You will need to offer possible solutions to the lender so that they can modify your loan.Think about your loan needs and suggest a loan modification that will allow you to get out of financial hardship.If your interest rate has gone up to an unmanageable level, consider asking for a reduction in it.If you are behind on your payments, you should ask your lender to grant you a temporary reduction in payments and a plan to repay the back payments over time.Make sure the amount you offer is something you can afford right now.If your home is less valuable than the balance of your loan, you may be able to get your lender to decrease it.It's important to state your request in clear terms.Don't say, "I want lower payments."Say, "I would be able to afford payments of $500 per month for the next three months, at which point I could resume paying my current payments."
Step 9: What have you done to make your life easier?
Write down what you have done to overcome the hardship.If you failed to qualify for a mortgage refinance, talk about it.Tell us about your efforts to cut household expenses.Make it clear to the lender that you are looking for a new job if you have lost one.This is where you can make your case that the loan modification is your last resort.
Step 10: Don't make a promise to modify again.
Mention that you are a good and responsible citizen and that if you get a chance to modify your mortgage loan, you will never default on your payments.Say so if your financial situation has improved since you experienced hardship.If you can convince your lender of your ability to pay modified payments, that will help your case.
Step 11: It is a good idea to end your letter by summing it up.
Give yourself time to restate your hardship, specific loan modification request, and your promise to make future payments.Only one or two sentences are needed for this section.
Step 12: Information on supply contact.
You can give the lender a phone number and email if you start a new paragraph.At their request, offer to submit any documentation or proof of your financial situation.Write "sincerely" and then sign your name beneath.You can type or print your full name again under your signature.At the end of the letter, thank your lender for their time and consideration.The borrowers should sign the bottom of the letter if the loan is in more than one person's name.
Step 13: Don't keep it long and sweet.
The length of your letter should be checked.Your goal is to get about a page in total.The lender may not bother to read all of your letter if it is any longer.If your letter is too long, go back and shorten it.Try not to include personal information in your case.These facts are not important to the lender.If your financial hardship is due to a drinking or drug problem, don't mention it.Don't complain in the letter because it will be ignored.
Step 14: Attach relevant documents.
Documentation of your financial situation is likely to be requested by your lender.Attach pay stubs and bank statements from the relevant time period to your letter to anticipate this need.If the lender asks you to give other documents, be prepared.
Step 15: Don't tell the truth.
Your lender will have access to your financial documentation and will likely request other records of your employment or other documents as necessary.They are likely to know if you are lying in your letter.Doing so will result in the denial of your loan modification request.The lender could request that you pay the entire loan balance immediately because of this.
Step 16: Carefully read your letter.
When you've changed the size of your letter, make sure to look for any errors.A well-written and error-free letter is a must for presenting yourself well in your letter.If necessary, have a friend or relative read your letter for you to spot any errors or inconsistencies.Because of the spellchecker included in word processors, it may be helpful to type your letter, rather than write it by hand.It will make revisions simpler.