Successful Hardship Letter For Loan Modification
There are three main eements in a successful hardship letter, and the more you address them directly, the greater the chances are that you will be successful in your loan modification request.
Utilize one of the many templates available, but PLEASE customize it to your situation according to the guidelines being shown below:
1) Tell the Lender what happened and how you arrived at this financial hardship. Lost your job? Was there a medical emergency or increased medical bills? Divorce? Explain to your bank, lender, servicing company the linkage between your hardship issue and how you now have decreased income and/or increased debt responsibilities. Finally, explain how the hardship translates into your struggle with making your monthly mortgage payments.
2) Explain to your bank about the timing surrounding these hardships. It is beneficial if you can demonstrate that you’ve never missed a payment and never made a late payment until you encountered these tough financial circumstances.
3) Lay out a plan that shows the bank how you intend to perform on your house payments and revolving and/or installment debt after loan modification, and how you won’t struggle financially after the successful loan modification. Create a budget and show your lender or servicer how it pays for everything…all this to demonstrate that you are taking your situation with high regard and going to work on it proactively. If you plan on making sacrifices in order to pull out of debt, such as giving up club memberships and/or foregoing family vacations, tell the bank or loan servicer this as well. You are trying to show the mortgage lender that you are committed to homeownership and will do whatever it takes to rise above your financial hardship.
The loan modification hardship letter is really the only opportunity you get to tell your side of the story and humanize it so that you’re not just looked at as an account number or a credit history. Be persuasive and compelling in your hardship letter, but don’t be negative, complain, or place blame. Outlining your hardship story, the timing of events, your good faith efforts, and your recovery plan, in concise, believable, and sympathetic language will help you write a compelling letter.
This will work for Do-It-Yourself loan modification customers and borrowers. Please also apply this to borrowers from Countrywide, EMC Mortgage, OCWEN, and HSBC.
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