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Hardship Letter
Lots of people think a hardship is based solely on financial matters, and that's not necessarily true. Just about anything that makes it difficult for you to continue making a mortgage payment might qualify you for a hardship.
Kevin Rasher - Senior Mitigation Officer at Modify Law Center
What is a Hardship Letter?
A Hardship letter is something most Mortgage Companies will require to consider you for a "Work Out". This is your opportunity to appeal to them to give you another chance. The hardship letter should not be used to complain to what they have done or not done to make your situation worse. This letter must be honest and represent the facts clearly. It must prove to them that the situation that caused you to fall behind was temporary and you are now in a position to make your payments on time. You must also have a legitimate excuse for falling behind... financial problems in itself would not be an adequate excuse. Loss of a job, death in the family or an illness would be an acceptable reason to fall behind on your Mortgage temporarily. Modify Law Center has many examples of letters that the Mortgage Company is looking for. Remember... the hardship letter is only one piece of the workout. You still need to prove many other things to the Mortgage Company before they will approve you for a Loan Modification or a Repayment Plan explains Modify Law Center. Please contact Modify Law Center for a free consultation of your case.
What constitutes a hardship?
Lots of people think a hardship is based solely on financial matters, and that's not necessarily true. Modify Law Center explains that just about anything that makes it difficult for you to continue making a mortgage payment might qualify you for a hardship.
Modify Law Center knows that the one thing that a bank does not want to see is a homeowner who wants to walk away simply because the home is no longer worth the amount the owner paid for it. While being upside-down is one of the qualifications for a short sale, a bank is under no obligation to grant the short sale solely on that basis.
Think back to when you took out the loan and what your life was like then. Has it changed since then? If your situation is unchanged, the bank might say you can afford to stay in your home at your present payment level. If your situation has changed, here are some examples that may qualify for a hardship:
Unemployment
Reduced income (furloughs, new job, partner's loss of job, pay cut)
Illness or medical emergency
Job transfer (voluntary or involuntary)
Divorce, separation or marital difficulties
Exotic mortgage terms (an adjustable-rate loan)
Military service
Death in the family
Incarceration
Increased expenses and excessive debt
Unexpected repairs or home maintenance
Modify Law Center - The basics behind a hardship letter.
In your hardship letter, you want to explain 3 things:
How you got into your present situation
What you have done to try to get out this situation
Why this situation is permanent because nothing you can do will change it
Hardship letter mistakes
Modify Law Center knows that writing a hardship letter is not a lot of fun. In fact, it can be downright depressing. Modify Law Center has noticed that many people had no idea how bad their lives have become until they start to write a hardship letter. Sometimes, seeing all those awful things in black and white is startling. Don't be surprised if you cry. Modify Law Center suggests you don't take a 90-degree turn and talk about how your life will improve.
Your life won't improve. In fact, it will only get worse. If there is hope on the horizon, if there is a chance for recovery, for you to become whole again the bank will not hesitate to grab a knife and plunge it into your heart. If the bank senses vulnerability, responsibility or anything else that shows the bank you might have the financial means at some point in the future to repay part of that debt, the bank will jump on it like hot fudge on a sundae. If the bank sees disposable income, it might ask for a seller contribution to grant a short sale or deny your loan modification.
Don't share your hopes and dreams for the future with the bank. It's none of the bank's business. The bank doesn't care about you or protecting your precious credit rating. In fact, if you're on the brink of bankruptcy or headed to foreclosure, you've got a story the bank should hear. So, tell it. Be truthful.
What else should go into a hardship letter?
You should put everything but the kitchen sink into a hardship letter and then, just for good measure, throw the sink in, too. Use numbers and percentages to explain loss of income or negative cash flow. Instead of saying you're borrowing money to make the mortgage payments, disclose the dollar amount and source of that debt such as "I've borrowed $10,000 against my VISA card to make my payments over the past 6 months, and I have tapped my cards to the max."
If your car needs maintenance or repair, if the cat has cancer and your vet bills are mounting, if your kids are starving to death on peanut butter sandwiches, and your fingernails are worn to the quick scrubbing other people's floors for pennies a day because your mom has moved in with your family and needs round-the-clock medical care, put it into your hardship letter. Paint the worst picture that you honestly can and keep going downhill with it.
Use simple words geared toward the education of a 6th grader. If you don't feel sorry for yourself by the time you have finished, maybe you didn't do the job right.
A valuable asset to Modify Law Center and its clients, Kevin Rasher became its Senior Mitigation Attorney in 2003, and he continues to help struggling homeowners achieve manageable loan payments through loan modification.
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Press Release Contact Information:
Kevin Rasher
Modify Law Center
Modify Law Center
27762 Antonio Parkway, Suite L 1-444
Ladera Ranch, California
Unite States 92694
Voice: (800) 509-2974
Fax: (949)313-1277
Website: Visit Our Website |
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