"Three tips of Essential Components to a Loan Modification Hardship Letter"

By: krishankant

As many homeowners struggle with mortgage payments that are beyond their current means, it is imperative to know the proper way to compose a loan modification hardship letter. Informing your lender of the circumstances surrounding your current economic difficulties is imperative, but it is equally important to explain to the lender the factors that make you a good candidate for loan modification. The best way to accomplish this is with a concise, descriptive letter that expresses three essential elements.

The following outline is a good place to start. Following the outline will help you to organize your thoughts in a logical way and will make sure that you cover all of the most important information. Your goal is to not only gain the understanding of your lender, but also to help secure the lender's cooperation in assisting you.

First, explain your financial difficulties and hardships. Your lender needs to know the circumstances that have led to your current situation. Explain to your lender if you've lost a job or if something else has occurred to reduce your income. Similarly, explain if the hardship has resulted from a medical issue or from a change in interest rates. The lender needs to know the circumstances that have created your current trouble.

Secondly, detail the time frame of the difficulties. Your lender needs to know that any late or delinquent payments are connected to the hardship you've expressed. If you are facing current circumstances that will soon cause you to default, give the lender a time frame for the default. It is important for the lender to understand that the late payments are connected to circumstances that are beyond your control, but that you're still making your best efforts to fulfill the payments.

Third, express to the lender the steps you're taking to keep up with the proposed modifications. If you've made changes to your budget, tell the lender the changes that you've made. It is imperative that your lender understands your commitment to home ownership and the steps you're undertaking to demonstrate that commitment.

It is important to remember that the hardship letter is your best opportunity to express yourself in a compelling way. Your lender needs to know your situation in brief, but also needs to have the information necessary to justify a change in your terms. Express your story, including that of your family. If community ties or neighborhood commitments give a reason for remaining in your home, make sure the lender knows this part of the story. You owe it yourself and your family to take the steps necessary to change your loan terms, so take the time to make sure to qualify.

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