Factors to Consider When Writing a Sample Hardship Letter
A document that gives information on why you are unable to pay your mortgage to avoid foreclosure is called a hardship letter. The bank may allow you to stay in your house at your present payment level in case your situation is unchanged. Hardship letter is meant to be written by people who are unemployed, have reduced incomes or have illnesses. The bank might modify your current mortgage to reduce the interest or even sell your house in a short sale in case you are unable to pay your mortgage. It is necessary for you to let the bank know of all your hardships in your letter.
It is quite hard to put down your issues on paper. The letter should never include statements of how you think your life is going to improve. If you show the bank that there is some hope of your situation improving, they will deny you the loan modification or short sale that you are requesting for. It will be advantageous to you if you inform the bank of your plan to repay the loan in future. You can incorporate number and percentages in your letter to explain your loss of income. In case you are borrowing money, tell the bank the amount and the source. You will only receive a loan modification if the bank sees that your situation is dire. Below are the things you should put into considerations as you write a hardship letter.
The bank may fail to believe your story if it is obvious. Your lender will never be convinced if you tell them your house value is less than your mortgage value. Include details about the changes in your financial situation since you got the mortgage. In case the company you are working for is relocating and your job is at risk if you are unable to sell your home and move, ensure you document this when writing the letter. Home owners with adjustable rent mortgages can use interest rates as a factor in their letter.
Avoid leaving out any information when writing down the letter. Showing your lender that you are in a terrible financial crisis should be your main goal. Make it sound like you are in a dire situation. Assume you are talking directly to the banker when writing the letter. You can consider consulting an attorney to enlighten you on the options available. It is possible to have other solutions to your hardship other than loan modification and short sale.
When writing your letter, avoid mentioning loan modification or short sale as the options you have. Let the bank know of your other efforts in trying to stabilize your financial situation. It is recommended that you show the bank that you are making an effort to find another job in case you lost your previous one.