One of your options to save your home besides refinancing is getting a mortgage loan modification. This option is the best choice for struggling homeowners who can not go for mortgage refinancing. To apply for a loan modification, you are required to submit a letter that proves your financial hardship which states the reason as to why you need help modifying your loan.
To set your letter apart from the hundreds of other loan modification application that is piling up on a reviewer’s desk, you need to learn to know how to exactly write a hardship letter so you can get noticed. The letter should basically explain how you got into the financial situation you are in now and what you intend to do to get out of it (and also stay out). Because of your intention to get out of debt and stay out of it, you would need as much help possible and that is why you need the loan modification. It is bottom line as simple as that.
If you understand the wrong way and the right way to write a hardship letter, you will make a big difference in convincing a lender to modify your loan. It is important to remember that your hardship letter should sound polite and agreeable. Gripping and complaining in your letter and being overly dramatic would turn the reviewer off. Remember that they are actually doing YOU a favor to consider your request, so be geniune and just go for a simple explanation.
Your letter should not be long winding and over 5 pages long. Keep it short and concise in less than two pages. Remember that your lender is receiving hundreds of letters like yours so you would want to get their attention as soon as they start reading the first paragraph.
You should also note that having received hundreds of hardship letters each day, your lender probably have heard just about every story imaginable and the odds are that you are not going to tell them anything new. So forget about coming up with excuses because that would not elicit much sympathy. Your only chance is your honesty and humbleness.
The best and most productive hardship letter that you can write is a short, truthful and heartfelt one. Write with some feeling and emotion without becoming to dramatic. Avoid going into too much detail, but write a simple explanation and ask for a resolution instead. A short explanation in one paragraph is all that is necessary to write. For example, “Due to the recent interest rate readjustment on my mortgage and decreased hours at my job, I’m finding it difficult to keep up with my new higher payments.” Lenders know how tough it is right now and they don’t need any lengthy explanations.
However, just because you are writing a short letter without too much detail, make sure that it is not too vague either. Include all necessary information and documents such as medical receipts, death certificates, unemployment notices and so on. Remember to identify WHY you failed to keep up with your monthly payments and include the DATES that coincide with the respected period. When coming to the request part, tell your lender specifically what you want. It could be a lower interest rate or a longer loan term or something else. If you are able to list a proposed monthly mortgage repayment amount that you know you can pay, that would help too.
When you close your letter, show your intentions to work out an equitable solution and thank the lender for the time and consideration. Don’t forget to include your contact information such as address, email address and phone number. Also enclosing a bank statement from the past two months, late notices on your car, last year’s tax returns and all other documents that are related that can verify your financial problem will help a lot.
You should also understand that there are things that would turn off your reviewer. The first thing to avoid is to mention any details about your legal problems. You need to present yourself as responsible so you don’t want your lender get any reasons to think that you are not. The second thing is your impeding divorce or other issues. If you really have to tell them about it, only give the most basic and relevant information.
Your letter should state that your financial hardship is due to things that are out of your control such as job loss, illness, death and interest re-adjustment and so on. If you state that you are in this hardship because you made a spur-of-the-moment decision in buying a new car, you will look like an irresponsible spendthrift.
Last but not least, lenders do not respond well to threats. So if you tell them that you will claim bankruptcy unless your lender approves your loan modification application, they will not help you out.
Good luck in writing your loan modification hardship letter!
Popularity: 4% [?]
Add A Comment