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Stop Foreclosure – The Hardship Letter Required For a Loan Modification

There are several different ways a person facing foreclosure can stop the action and save their home. The main way is to contact their mortgage company and request that their existing mortgage be modified.

The reason the person is facing foreclosure is that for some reason they can no longer make their monthly mortgage payment. With a modification they and the mortgage company work together to reduce the monthly payment to a level that the person can make and that is acceptable to the mortgage company and to the investor on the mortgage.

When applying for a modification the person facing foreclosure has to submit current and detailed information on their finances. They also have to let the mortgage company know what their current income is.

They also have to indicate their current assets. This includes the amount owed on their mortgage and the value of their home. Next is the value of any retirement funds or investments that they may have. They also have to indicate the current balance in any checking and savings accounts that they have. Last they have to indicate the value and the amount they owe on any cars boats and any recreational vehicles that the own.

They also have to summarize their current liabilities. Here they list the balances and monthly payments on any credit cards or installment loans they have. They also indicate what types of insurance they have and how much they pay for these. If they are paying child support, alimony or maintenance payments, they include that too. Next they summarize how much they spend for food, utilities, phones and the internet on a monthly basis. slickcashloan.com

Even though they have their income, assets and liabilities listed, every mortgage company requires that the person include a Hardship letter. In this the mortgage company asks them to explain why they are not able to pay the monthly payment on their mortgage.

Many would think that after they documented their income, assets and liabilities, the reason they are unable to make their monthly mortgage payment should be clear. Well, it isn’t. Any person facing foreclosures who wants to lower their monthly mortgage payment through a loan modification has to write this hardship letter. In it they need to explain what caused them to have the financial challenges they are having now.

That is a challenge for most people. They don’t know what to say in the letter. Many have never written a letter like this and are worried that they may not express themselves clearly. Some are worried that they may say too much.

So what should the person facing foreclosure include in this letter? They should include all that happened to cause them to no longer be able to make their current monthly payment.

If they had an adjustable rate mortgage and their monthly mortgage payment suddenly increased far more than they expected, they should indicate that. They should also add whether or not they had any knowledge of how much their payment would increase.

If they lost their job or their income was reduced, they should indicate that. They should also explain how they had not expected that to happen and did not have time to plan for the sudden drop in income

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