Sample Hardship Letters That Help Save Your Home

A foreclosure for anyone can be financially, emotionally, and psychologically devastating. Your family is forced to be physically removed from friends, family, and neighbors whom they have come to love and support. As if that weren’t enough, you have to deal with incessant calls from collectors, explaining that you still can’t pay your bills.

The foreclosure process is not only long but can be humiliating. As soon as an owner realizes that he is beyond his means, a letter of financial hardship becomes a way out or a light at the end of a very dark tunnel. Written correctly, a financial hardship letter can result in a positive outcome for all parties involved.

Contrary to popular opinion, lenders don’t like the idea of ​​losing money in a weak market due to foreclosures. They have to consider the loss of income due to a vacant property and the expensive legal fees it costs them to proceed with a foreclosure.

Lenders are also not real estate agents. It is not their job to try to sell your home and as a result they are unsuitable to do so. Now they must finance the upkeep, insurance, security and marketing of a home they know very little about. They may have the black and white facts about it, but they don’t know anything about the details of your home sale. The simple writing of a financial hardship letter can help avoid this fate for both you and the lender. Federal funds have been established that will assist the lender, through the loss mitigator, in providing the homeowner with options to avoid foreclosure.

Loan modification is contingent solely on the initial submission of a letter of financial hardship. This gives the lender a written decree of the reasons the homeowner is behind in payments. This letter gives the loss mitigator insight into the financial and personal reasons for the homeowner’s hardship. It also gives the lender personal reasons to help the homeowner try to save the mortgage with a short sale or loan modification.

The lender will want to know as much information as possible about why the owner is late. The hardship letter gives the lender this information in a clear and concise manner. They need this information in order to refinance or offer a short sale.

The lender will need to know the following details in your hardship letter:

1. Is this an ARM (Adjustable Rate Mortgage)?

2. Has the borrower been convicted of a crime punishable by imprisonment?

3. What is the current income status of the borrower?

4. Has there been any catastrophic illness in the family?

5. Has there been a layoff or job loss?

6. Does the borrower have to travel a long distance to survive?

7. Has there been a business failure?

8. Has there been a death in the family that makes contributions to the mortgage?

9. Is the primary borrower getting divorced?

10. Is the borrower seeking a military posting?

11. Has there been significant damage to the home due to weather or fire?

A sample hardship letter is the key to a homeowner getting a timely response to their loan modification request. This sample letter will make sure you have all the necessary information a loss mitigator will need to help you avoid foreclosure on your home as soon as possible.