When negotiating a loan modification due to a financial hardship, you will most likely be asked to submit a hardship letter to your mortgage lender. The hardship letter is one of the most important aspects of getting your loan modification request approved by your lender. As such, you only really have one chance to get it right. They will not ask you to resubmit your hardship letter if you do not do a good job with it the first time.
A few tips before we get started...you don't want to paint a gloomy future with your mortgage. In other words, you don't want to have your lender think that you won't have a job, or you won't make enough money to afford some type of reasonable payment in the future. If you have lost your job then you will want to have gotten a new one before you submit for a loan modification. With no job, there is no way to make a payment - any payment for that matter - so why would they waste their time and money to modify your mortgage if your situation hasn't changed?
This leads us to discussing the questions you must answer in your loan modification hardship letter. But before you do, you may consider learning more in depth information about the loan modification process. You want to be prepared as you work on your own loan modification so that you can get it approved as fast as possible.
What Is The Hardship That Has Caused You To Have Problems Making Your Mortgage Payments?
In answering this question, you want to briefly spell out what happened. Just the facts, no long drawn out story or drama. An example would look like this: Since I got my mortgage, my hours at my job were cut from 40/week to 30/week which has resulted in me losing approximately 25% of my salary that my loan was originally based on.
You also want to present the timeline of when all of this happened. Again, no story, just the facts.
How Has The Hardship Impacted Your Ability To Make Your Mortgage Payments?
With this question, lay out the idea that you have to rob Peter to pay Paul. You can't make all of your debt payments and you are choosing to pay some things and not others. You also want to make a point to explain that you want to work out a way to get an affordable mortgage payment so that you can stay in your home. If you have kids, explain that you would like to keep them in the school that they are in etc.
What Is Your Situation Now?
Here you want to talk about any stability you have in your life, your job etc. Paint the picture that if you had lost your job, that you now have one and that you expect to stay there. You may make some sort of plea that you have been able to set aside any mortgage payments that were mailed back to you since you had gone late and weren't able to get caught up in one full payment like most lenders like to see in a normal default situation. You can use this money as a bargaining chip as you negotiate your loan modification.
Always keep in mind, your situation is unique to you. Don't listen to others who have had their loan modification request turned down. Their situation is theirs, not yours. Keep focused on what you are doing. For further information on writing a hardship letter visit: Write A Mortgage Loan Modification Financial Hardship Letter and Negotiating A Loan Modification - How to Negotiate With Your Lender.
If you have tried to make progress with a loan modification on your own and haven't had any success, please complete the following form and we can put you in touch with a loan modification attorney to see if they can provide you with additional assistance.
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