What a Sample Hardship Letter Should Entail
A hardship letter is a document that explains why you are unable to pay your mortgage in an attempt to prevent a foreclosure. 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. If the bank realizes that you are unable to pay your mortgage, they may sell your house in a short sale or modify your current mortgage to fit your interests. Your hardship letter should contain all the hardships you are facing.
Some people are usually unable to put down all their hardships on paper. The letter should never include statements of how you think your life is going to improve. When the bank sees that your current situation may soon be over, they will refrain from giving you a loan. The bank needs to know that you have plans of repaying the loan once your financial status improves. IT is easier for the bank to understand the level of income loss you have undergone if you use figures and percentages. Make sure that your letter includes the amount and source of the money you are borrowing. You will only receive a loan modification if the bank sees that your situation is dire. Here are some of the factors you should consider when writing 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 an instance where you are forced to relocate because of your job, inform the bank of your urgency to move. High-interest rates can be included as a factor for hardship if your mortgage is adjustable.
Write a simple letter which is well detailed. The main reason why you are writing the letter is to show the bank that you are financially unstable. Ensure that you sound needy in the letter. You should use your language when writing as if you are talking directly to the banker. 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. It is advisable to show the bank that you tried other ways of resolving your financial problems before coming to them. In an instance where you have lost your job, inform your lender about your efforts to find a new job.