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  • Loan Modification Hardship Letter

    One of the many requirements for a home loan modification is the Hardship Letter.

    This is a letter that outlines the reasons as to why the home owner is applying for the loan modification program. The objective of the letter is to describe to the lender why the home owner’s particular hardship has created a situation that makes it impossible for them to continue with the original mortgage agreement, and that if the hardship isn’t addressed and the loan agreement not modified, the end result will be foreclosure.

    The letter should be written as clearly as possible without being too wordy. When the lender reads the document, they need to be able to clearly draw a line between the demands of the current loan agreement, and the hardship, and not be forced to read pages and pages of information to draw that connection. The length of the hardship letter should be nicely and clearly formatted, and be no longer than a single page of written text, typed or otherwise.

    The tone of the letter should be professional, honest, and without extraneous language or emotion. The facts of the letter will need to stand on their own, the bank will only decide on a modification if they know the home owner can afford it, bottom line. They are not in the business of supplying homes at a loss merely because they feel bad for the applicant.

    While it may be clear and obvious that most hardships require almost no explanation and are self evident, this isn’t always the case. For example, losing a job is a rather clear impact on a home owner’s ability to pay money since it is the job that provides the income. Lenders also know that losing an income source makes it difficult to pay for an expense, however a job loss is not in itself a permanent problem. If the home owner has exhausted all avenues available to rectify the situation, the hardship then goes beyond that of losing the job to one of lack of opportunities available to replace that lost source, and that this situation doesn’t have a solution that is apparent in the near to distant future.

    Other hardships such as a death in the family may seem obvious as to the effect it can have on people, however the effect on the home owner of their loss may need to be communicated in a little more detail. Perhaps to combat the anguish the applicant has sought medical assistance, effectively reducing output dramatically resulting in the inability to work and function effectively.

    Joining the military, moving and getting a divorce are all valid reasons for having difficulty in continuing with the payments as outlined in the original mortgage agreement. Seeking help to get through a hardship is nothing to be ashamed of and a vital part of the home owner’s continued efforts to maintain their agreements, prevent the uprooting of their families, can go towards not removing kids from their schools and jeopardizing their emotional well being and a host of other benefits. If you are having difficulty with the loan modification process, we are here to help. Please tell us how a hardship is effecting your life by filling out the form.

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