What is a Hardship Letter?
A Hardship letter is something most Mortgage Companies will require to consider you for a “Work Out”. This is your opportunity to appeal to them to give you another chance. The hardship letter should not be used to complain to what they have done or not done to make your situation worse. This letter must be honest and represent the facts clearly. It must prove to them that the situation that caused you to fall behind was temporary and you are now in a position to make your payments on time. You must also have a legitimate excuse for falling behind… financial problems in itself would not be an adequate excuse. Loss of a job, death in the family or an illness would be an acceptable reason to fall behind on your Mortgage temporarily. Sidell Law Offices, P.C. has many examples of letters that the Mortgage Company is looking for. Remember. The hardship letter is only one piece of the workout. You still need to prove many other things to the Mortgage Company before they will approve you for a Loan Modificationor a Repayment Plan explains Sidell Law Offices, P.C. Please contact Sidell Law Offices, P.C. for a free consultation of your case. Sidell Law Offices, P.C. can be reached at 1-877-74-LOANMOD or at http://www.sidelllaw.com.
What Constitutes a Hardship?
Lots of people think a hardship is based solely on financial matters, and that’s not necessarily true. Just about anything that makes it difficult for you to continue making a mortgage payment might qualify you for a hardship explains Sidell Law Offices, P.C.
Sidell Law Offices, P.C. knows that the one thing that a bank does not want to see is a homeowner who wants to walk away simply because the home is no longer worth the amount the owner paid for it. While being upside-down is one of the qualifications for a short sale, a bank is under no obligation to grant the short sale solely on that basis states Sidell Law Offices, P.C.
Think back to when you took out the loan and what your life was like then. Has it changed since then? If your situation is unchanged, the bank might say you can afford to stay in your home at your present payment level goes on to explain Sidell Law Offices, P.C. If your situation has changed, here are some examples that may qualify for a hardship:
*Reduced income (furloughs, new job, partner’s loss of job, pay cut)
*Illness or medical emergency
*Job transfer (voluntary or involuntary)
*Divorce, separation or marital difficulties
*Exotic mortgage terms (an adjustable-rate loan)
*Death in the family
*Increased expenses and excessive debt
*Unexpected repairs or home maintenance
Sidell Law Offices, P.C. – The Basics Behind a Hardship Letter
When Sidell Law Offices, P.C. initially interviews sellers who want to sell on a short sale, they ask the sellers to describe their hardship. Sidell Law Offices, P.C. knows that agents who do a lot of short sales can sometimes become a little insensitive because they are focused on the statistics. For example, when a seller says she is getting divorced, it’s possible that my eyes might light up and I’ll blurt out, “That’s fabulous.” But then Sidell Law Offices, P.C. realizes how that comes across, which is not at all in the way he intended it. It’s good to be getting a divorce and trying to do a short sale or loan mod because relationship difficulties generally meet bank guidelines. It’s not fabulous that the parties are splitting up.
In your hardship letter, you want to explain 3 things:
*How you got into your present situation
*What you have done to try to get out this situation
*Why your inability to pay the mortgage in the past may have improved recently
*Why this situation is permanent if you don’t see any realistic possibilities of improvement in the near term
Hardship Letter Mistakes
Sidell Law Offices, P.C. knows that writing a hardship letter is not a lot of fun. In fact, it can be downright depressing. Sidell Law Offices, P.C. has found that many people have no idea how bad their lives have become until they start to write a hardship letter. Sometimes, seeing all those awful things in black and white is startling. Don’t be surprised if you cry. But don’t take a 90-degree turn and talk about how your life will improve suggests Sidell Law Offices, P.C.
Your life won’t improve. In fact, it will only get worse, especially if you are in denial about your compromised financial situation. The best way to write a hardship letter is to state the unadoring truth Sidell Law Offices, P.C.
Don’t share your hopes and dreams for the future with the bank. It’s none of the bank’s business. The bank doesn’t care about you or protecting your precious credit rating. In fact, if you’re on the brink of bankruptcy or headed to foreclosure, you’ve got a story the bank should hear. So, tell it. Be truthful.
What Else Goes Into a Hardship Letter?
You should put everything but the kitchen sink into a hardship letter and then, just for good measure, throw the sink in, too. Use numbers and percentages to explain loss of income or negative cash flow suggests Sidell Law Offices, P.C. Instead of saying you’re borrowing money to make the mortgage payments, disclose the dollar amount and source of that debt such as “I’ve borrowed $10,000 against my VISA card to make my payments over the past 6 months, and I have tapped my cards to the max.” However, the hardship letter needs to be brief enough not to lose the attention of the reader, states Attorney Moss Sidell.
If your car needs maintenance or repair, if the cat has cancer and your vet bills are mounting, if your kids are starving to death on peanut butter sandwiches, and your fingernails are worn to the quick scrubbing other people’s floors for pennies a day because your mom has moved in with your family and needs round-the-clock medical care, put it into your hardship letter. Paint the worst picture that you honestly can and keep going downhill with it explains Sidell Law Offices, P.C.
Use simple words geared toward the education of a 6th grader. If you don’t feel sorry for yourself by the time you have finished, maybe you didn’t do the job right.