Loan Modifications The Hardship Letter You Must Submit To The Lender

During the loan modification process, you will have to convey to your lender your current “hardship” situation, what caused it and what you have done to solve the problem. By writing a compelling Hardship Letter you are communicating to the lender that you have suffered an “acceptable hardship” and will satisfy the bank that, given the opportunity, your loan will be paid promptly in the future.

The purpose of a Loan Modification Hardship Letter is to give an overview of your family’s current financial situation.   What might be an acceptable hardship? Listed here are the generally accepted hardships:

1. Loss of job or decrease in income 
2. Homeowner, family member, or spouse dying
3. Family member or home owner who becomes ill
4. Divorce or relationship breakup
5. Compulsory work relocation
6. Shock from interest rate reset (adjustable loan)

How can you put together a credible hardship letter to support your application for a loan modification which informs the lender of your financial situation? Try to remember the fact that lenders are swamped with desperate debtors searching for a cost effective way to stay in their home.

* A successful loan modification hardship letter should be short, 1-2 pages max.
* Describe the hardship.
* Explain what you’re doing to solve the problem and get back on track.
* Convince the lender that you are responsible and want to save your home.

Savvy and energetic homeowners can negotiate with their lenders to reduce their interest rate, shrink the principle or modify the term and thus start paying a more manageable monthly payment. It is not necessary to be a financial expert; simply understanding the process may help you lower the amount you repay.

WARNING! The process of drafting a hardship letter is only the first step to getting a loan modification. In addition, you will be asked to show an entire statement of finances and documents showing your income. To succeed and give yourself a chance at success, arm yourself with negotiating tips and insider information before contacting your lender about loan modification.

Scott Hudspeth is a nationally recognized expert specializing in bringing new solutions to homeowners.  Scott has also helped release hundreds of Americans from the “credit prison” that too many people find themselves in.  If you find yourself  “payment pinched” or when you or one of your friends finds yourself needing real answers and real solutions to credit issues, you can confidentially contact him at 800-466-5626 ext 149 or at Scott@AmeriFirst.com