April 15, 2024


Mad about real estate

Sample Hardship Letter For A Mortgage Loan Modification

You can save your home. Many people are losing their homes due to the downturn in the U.S. economy. Many of these homeowners have ARM mortgages which raised their mortgage payments to astronomical levels.

Other homeowners are experiencing cost of living increases and income losses. There is hope and it all begins with a Hardship letter. This article will present instructions on creating your own hardship letter and also a sample hardship letter for a mortgage loan modification.

Natalia Osorio Editor of the “Stop Foreclosure Loans” website — https://www.StopForeclosureLoans.org — pointed out;

“…Mortgage companies want you to keep your home and continue paying for it, because it is easier to retain a customer than complete the process of finding another. If you feel capable of making payments at a lower interest rate with reduced monthly payments you need to compose a hardship letter explaining why you have fallen behind in your payments and how the modification will enable you to continue paying for your home…”

Try not to get involved with the collections department. Contact the Loss Mitigation department of your mortgage company and request the forms and or information they require to process a loan modification. Do not discuss your case at this time. Without proper research you should not guess at the amount of your income or household expenses, so do not complete a phone interview the first time you call. Just obtain the information you need to begin the process. You only get one shot at this so all of your information needs to be as accurate as possible. Usually mortgage companies will require proof of financial information and falsifying information can lead to fraud charges so carefully review all of your information.

You will need to create a monthly personal expense report listing all of your bills and household expenses including credit cards, utilities, insurance (life, car, house etc.), car note, groceries, medical, household supplies, school supplies, entertainment, clothing, etc. You will need to provide proof of income. You will need to provide a hardship letter.

Your hardship letter should not be more than one page long. It should be clear and to the point. You may include a payment plan or offer, however the mortgage company will determine if you qualify for a modification according to the financial and expense information you provide. Mortgage companies want to be sure you need a loan modification. They also want to be sure you can maintain your monthly payments if you are awarded a modification. Companies like to see that you have 10{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} more income than expenses after the reduction in monthly mortgage payments. In other words if your mortgage is $1000 a month and expenses including this are $3500 per month and income is $3275 per month they want to be sure if they lower your interest rate you will have enough to cover expenses with $327 left over for emergencies.

Your name

Loan number

Company name

To whom it may concern:

I, (your name), do herein request assistance in the form of a loan modification with a back payment and late fee waiver. Due to circumstances beyond my control I am unable to remain current on my mortgage payments to (your mortgage company). I am asking for your assistance so that I may resume payments on my home and prevent foreclosure.

Since (date problems began) I have sustained an increase in expenses (explain reason for increase) Since (date problem began) I have experienced a loss in (explain reason for decline in income). In (date you became late on payments) I depleted all my resources and was unable to maintain my mortgage payment. I am requesting your assistance in saving my home from foreclosure.

(Explain how you feel the adjustment will assist you in maintaining your home. Explain how long you feel your situation will last, and how and why you think it will improve in the future.)

I am capable of (state when or how much you can make in payments or how much you are capable of paying in back payments if necessary). (State why you think it is in your and their best interest to work together on an agreement. Such as the everyone’s loss especially their financial loss if the home goes into foreclosure. I wish to work with you for the mutual benefit of keeping my home and making payments.

Sincerely, X

“…You can save your home. Begin your research now and explore all of your options. There are many tools to help you. Best wishes in your endeavors…” N. Osorio added.

Further information about how to get professional assistance with a mortgage loan modification by https://www.StopForeclosureLoans.org