Factors to Consider When Writing a Sample Hardship Letter
A letter that gives details on your inability to pay your mortgage to avoid foreclosure is known as a hardship letter. In case your situation is the same, the bank will permit you to continue staying in your home. Hardship letter is meant to be written by people who are unemployed, have reduced incomes or have illnesses. The bank might modify your current mortgage to reduce the interest or even sell your house in a short sale in case you are unable to pay your mortgage. You should be able to describe your hardship in the letter.
At times it may be difficult for you to state all your problems in the letter. In the letter, avoid talking about how 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. It will be advantageous to you if you inform the bank of your plan to repay the loan in future. Sometimes it is necessary for you to describe your loss of income using numbers and percentages. In case you are borrowing money, tell the bank the amount and the source. You will only receive a loan modification if the bank sees that your situation is dire. Below are the things you should put into considerations as you write a hardship letter.
Your letter should never contain an obvious story. Explaining that your house value has reduced and that your mortgage value is more than the value of your house will hardly convince the bank. The letter should contain explanations on how your financial situation changed from the time you took the mortgage. In case the company you are working for is relocating and your job is at risk if you are unable to sell your home and move, ensure you document this when writing the letter. In case your mortgage is adjustable, you can use the increasing interest rates as a factor.
Avoid leaving out any information when writing down the letter. Always aim at convincing the bank that your financial situation is wanting. Make it sound like you are in a dire situation. You should use your language when writing as if you are talking directly to the banker. Contacting an attorney may be a good idea to help you know of all the options you have. There could be other options for you depending on your hardship other than loan modification and short sale.
Make sure that you avoid prioritizing loan modification or short sale. Inform the bank that you tried other methods to resolve your financial crisis before turning to them. It is recommended that you show the bank that you are making an effort to find another job in case you lost your previous one.