It is important to introduce yourself and give information on your current loan status along with your account number.
State the reason why can’t you continue to pay the monthly mortgage obligation. Reasons can be as follows:
- Medical – family illness or death
- Income Loss – job loss, lowered wages or hours, job change, etc.
- Business changes – increase in expenses or accounts payable, lower revenues, loss of locations, etc.
- Marital Status – divorce or separation
- Other – increase in household expenses, tax liens, property tax increase, caring for ill parent or spouse, loss of daycare, etc.
If your income has decrease do yourself a favor and eliminate luxuries such as, private school tuition, cable, movie night, extra phones, etc. In other words, take a look at your expense and cut the fat.
If your income fluctuates state that. Get a part-time job, if you need to.
Your objective is to show the lender your willingness to do what is necessary to repay the loan that you have.
Write a couple of paragraphs describing your situation financial situation. Give a detail description of the effects of the mortgage payment issues, adjustments in interest rate or financial strain has had on the family. Give as many facts, figures, detail and emotion as possible.
Make the hardship letter as tear jerking as possible, but explain that the problem whatever it may be is resolved or will require a certain amount of time to be resolved but more importantly you feel you will be successful and able to resume payment of the mortgage if the lender will offer some relief to the financial strain.
IV. Request and Closing
Make a statement requesting assistance from the lender and thank them for their consideration and help. Assure the lender that the issue has been resolve, but you need assistance to get your financial dilemma in order. Then, sign and date your request. Include with the hardship letter all other required documentation for your loan modification or short sale such as,
- 2 years of W2 forms
- 2 years of 1099 forms
- tax returns for the last two years
- current pay stubs
- 2 most recent bank statements
- proof of payment of insurance on the property
- expense/income statement
The documents that the lender is requesting will be used to determine if you can afford the home; therefore, there are some tips that are necessary for you to know to increase your chances of qualifying for the loan modification.
Shop around for insurance. This can not be stressed enough with your premium being influenced by your now lower credit score it is to your advantage to shop around. All insurance now use a scale rating of A through Z. A through D is the best while W through Z is the worst. Do not settle for less coverage. Compare the policy, and remember you can change insurance companies at any time.
Check into whether you are paying too much for your property tax. In most states the property taxes are determine by the market value. In recent years, the market value has decreased.
If you are unsure of what the value is for your area or home, you can visit www.zillow.com or www.trulia.comfor information on recent sold homes in your area. You can also contact a Realtor who can provide a comparative market analysis for a minimal cost or no cost.