Hardship Letter To Mortgage Company

To put it bluntly, writing a hardship letter to a mortgage company is uncomfortable at best and miserable at worst. But, in a situation where home foreclosure is a possibility, one can expect to have to step out of their comfort zone to save their way of life. A hardship letter is typically written to a mortgage company with the intention of negotiating a loan modification from the lender. This means getting a lower monthly payment, interest rate, or both. Of course, coaxing a mortgage lender to relax the terms on which you pay them back is not an easy task. Use these tips for hardship letter writing to help improve your odds of success.

To Write a Hardship Letter, You'll Need:

• A legitimate reason for your inability to pay.
• Documentation supporting the reasons you provide (examples include termination letters or medical bills).
• The ability to write a direct, clear letter.

1. Treat your hardship letter like a docket of evidence to the mortgage company. It’s easily to instinctively think that the most effective hardship letter tell a convincing, heart-wrenching sob story to the lender. But in the world of finance, there’s no room for emotion. Instead, you should focus on why it is in the mortgage lender’s best interest to offer you new loan terms. Remember that the only reason lenders agree to loan modifications is that the potential income lost from having to sell a home in foreclosure outweighs the income lost from new loan terms.
2. In this docket, provide solid evidence of a financial hardship. In most cases, a hardship letter to a mortgage company will only be considered if it offers proof of a legitimate financial detriment. This includes situations like job loss, hospitalization, or the passing of a family member. If you simply overextended yourself financially, don’t expect the mortgage company to be particularly sympathetic.
3. Make the letter succinct and to the point. Since the housing market bubble burst, the rate of mortgage delinquency and default has exploded. As a result, the number of hardship letters that mortgage companies receive has risen at similar rates. Remember, it is a person’s job to read and analyze all these letters – so keep it short and sweet. A hardship letter that rambles on for page after page isn’t likely to win its reviewer over.
4. A hardship letter to a mortgage company should stress the fact that you simply can’t afford the loan. It should not, however, imply that you can’t afford the home. As mentioned before, mortgage lenders only agree to loan modification to avoid the immense costs of foreclosure and sale. If they’ll have to go through that process regardless of modified loan terms, they won’t alter them in the first place. It is therefore paramount that you prove you can pay for the house, just not with the current interest rate or monthly payments.