How to Write a Hardship Letter For Loan Modification

By: Wesley Kennedy

The hardship letter is used to gain the sympathy and cooperation of your lender when applying for a mortgage modification loan.

You will need to explain to the lender how and why you are currently experiencing a financial
hardship. You want your letter to illustrate not only how it happened but what steps you have taken to correct the problems. Your lender will want to know if you will be able to make the payments on a modified loan. You will need to show specifically how you will do this, perhaps you made a new budget and cut dining out, or weekly movie night. Be specific!

Knowing what qualifies as a financial hardship is your first step to applying for a home loan modification.

1. Job loss or salary reduction

2. Recent death of the homeowner, spouse or close family member

3. Serious medical expenses

4. Divorce

5. Adjustable rate mortgage
- sudden large increase

Now the question becomes, how do you make your hardship letter stand out in the crowd? Obviously lenders are being flooded with applications since the announcement of Obama’s home stimulus plan. You need to explain your individual situation succinctly in order to gain the lender’s empathy and cooperation. Below are some suggestions on how to write a successful hardship letter:

Keep it brief. Your letter should not exceed 1 to 2 pages

Describe your situation, what caused the hardship

Explain what you have done deal with this situation

Detail your plan for the future, how will you get things on the right road again

Be sure to tell the lender that you want to save your home and will do what it takes to make that happen

You are not alone in your desire for a home loan modification. If you do your homework and successfully qualify the rewards could include lowering your interest rate, longer term loans, and lowering your monthly mortgage payment. The biggest reward of all, saving your home!

Writing a spectacular hardship letter is only one step in the loan modification process. You will need to fill out an application, provide all of your financial information including income documentation. Do not contact your lender until you have done the research and know exactly what is needed to apply and qualify for a home loan modification. Acting impulsively could cost you your home!

This is very confusing and overwhelming to most that are facing a financial hardship and the possibility of losing their homes. You are not alone! But, there is help available to walk you through the process.

Don’t hesitate if you are already delinquent on your mortgage time is of the essence. Waiting even another day could mean losing your home. You don’t have to do it all by yourself, you don’t even have to fully understand all of the steps. But you do need to act now if you want to save your home and get back on the road to security.

Article Source:
http://www.articlesbase.com/mortgage-articles/how-to-write-a-hardship-letter-for-loan-modification-1198703.html

To get help right away, click here for more information about the home stimulus package