Tuesday May 23, 2017
 

An Effective Hardship Letter

Quite contrary to what most homeowners think, mortgage lenders are ever ready to lend a helping hand to delinquent homeowners who are in need of assistance in order to make mortgage payments.

Most mortgage lenders frown upon the practice where individual borrowers simply walk away from their home loans as soon as they realize that they (homeowners) owe more on the home loan than the level of equity in their homes.

These people leave the lenders with no other choice than to foreclose on the property. However, the large number of distress properties on the market has made foreclosure an unfavorable option for mortgage lenders.

As a result, lenders are taking advantage of foreclosure prevention programs initiated by government and their own in-house programs to reduce the number of properties they would have to foreclose upon.

However, it is impossible for a delinquent homeowner who feels responsible for his or her mortgage loan to get the lender’s assistance if that homeowner does not present his or her difficulties to the mortgage lender. It is possible for distress homeowners who are looking for mortgage assistance to walk into the offices of their mortgage lenders and seek to discuss their mortgage problems with them.

In spite of this possibility, the best way for distress homeowners to approach their lenders is by means of a formal letter. This letter is supposed to detail out all the factors that are contributing to the homeowner’s inability to make mortgage payments.

This letter is known as a Hardship Letter and along with the borrower’s financial statements and mortgage payment receipts; the lender would decide on whether to offer the distress borrower mortgage assistance.

Mortgage lenders require borrowers to submit hardship letters before they can be considered for foreclosure prevention programs like short sale and mortgage loan modification. This puts a lot of stress on homeowners who are looking to write a hardship letter to their mortgage lenders for the first time.

The ideal way to create an effective hardship letter that will provide strong reasons to back your call for mortgage assistance is to highlight the changes that have occurred in your life that have the power of affecting your ability to make mortgage payments.

Lenders will refuse to offer you mortgage assistance if it turns out that your situation at the time of taking the home loan has not changed that much when compared to your current condition. If you are over shadowed with debts, you can easily be seen as someone who is not managing his or her financial resources well. In such a case, proper financial management program may be recommended instead of mortgage assistance.

However, when there is clear evidence of; death in the family, serious healthcare problems, job loss, incarceration, divorce and problems that require increase financial spending, the mortgage lender will understand your need for mortgage assistance. After all, the main aim of the mortgage modification program is to help borrowers who would be able to continue with mortgage payments if and only if their monthly payments are made more affordable.

It is just not enough to state the sort of changes that are affecting your ability to make mortgage payments. In your hardship letter, you need to let the lender know how these factors came into being and equally important is how you have planned to get out of them. It is this last point that normally causes a lot of people to write incomplete hardship letters.

This is because instead of highlighting all the problems that make them eligible for mortgage assistance, these people most often than not are unable to face the truth especially when writing down the problems they have encountered or are still encountering brings back bad memories. They prefer to talk about what they want to do to improve their financial conditions instead. 

 

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