The most important document you submit to your lender for a loan modification is your hardship letter. Your hardship letter gives your lender a good look at your unique and desperate situation, so they can fairly consider helping you with your loan and will allow you to do a loan modification. Based on that fact alone, it's imperative you ensure your hardship letter accurately and fully expresses your situation.
Other reasons your hardship letter is a necessity:
• If you want your lender to agree on a specific modification agreement
• If you want your lender to agree on a forbearance agreement
• If you want your lender to agree on a short sale
• If you want your lender to agree on a deed-in-lieu of foreclosure
The first step in writing your hardship letter is to first decide specifically what you're requesting from your lender. Avoiding foreclosure is possible, but some ways will allow you to keep your home while other ways won't. Do your research and decide which way is best for you, and make sure you know the pros and cons regarding each foreclosure situation.
When it comes to loan modification, what does an effective hardship letter look like?
A good hardship letter written for the purpose of receiving a loan modification will be unique and personal, and will explain your desperate situation. You must demonstrate, within your letter, the reason you have fallen behind on your payments, and the reason must be a legitimate reason like the following:
• Loss of your job
• Relocation of your job that results in two mortgage payments
• A job change
• A long term heath problem
• A death in the family
You must cast embarrassment to the side when preparing your hardship letter for your loan modification. Remember, at some point, everyone experiences a financial hardship.
Be detailed in how your situation came about and how it has resulted in your inability to make your payments as they currently are; leading to you requesting a loan modification. If possible, it's always a great idea to list the ways you've attempted to keep up with your current mortgage payments such as:
• Tapping into your savings
• Tapping into your retirement funds
• Renting out rooms in your home (If you are unable to rent rooms because you do not have any rooms to rent, mention that as well.)
After you've listed the measures you've taken to avoid being delinquent on your loan payments, you must ask your lender for help. As I am sure your story truly is, do not forget to be honest, heartbreaking, and very, very detailed. Other humans will be receiving and reading your letter requesting your loan modification, and compassion can and will play into their decision.
Final Reminders for Preparing your Home Loan Modification Hardship Letter
It is always to your benefit to remind your lender that a forbearance agreement, loan workout, or short sale is a much better alternative than allowing the home to go into foreclosure. Be honest, and if you feel that in the near future you'll be able to afford payments once you exit your current situation, tell that to the lender! If you can get out of your problem situation within six months, the bank may be more likely to consider a loan modification.
Finally, do not under any circumstances lie on your hardship letter. You have to remember that everything you state within that letter to request your loan modification must be able to be proven with bank statements, credit card statements, and any other documentation requested by the bank. Your bank most likely will comb through your finances a little more thoroughly this time, as opposed to when you were originally granted the loan. Most importantly (regarding being honest), if you haven't told the truth on your loan modification application, you may be turned over for mortgage fraud.
To learn more about the home mortgage loan modification process and how you can modify your loan yourself, please visit here to get a Complete Loan Modification Kit.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment