Believe it, or not, your mortgage lender is interested in the hardships you've endured that have led you to seek better terms on your mortgage loan. In fact, if you are facing foreclosure and looking for a loan modification, a letter explaining the hardships you've experienced is required.
Common hardships that banks often find acceptable
- Loss of employment
- Reduced income
- Death or illness of homeowner or family member
- Divorce or separation
- Adjustable rate reset-payment shock
Everyone experiences difficulties in life, and they are not all your fault. For example, no individual homeowner could be blamed for the nationwide banking crisis, recession, or housing bubble that the country experienced. These issues have had far-reaching consequences and have placed many homeowners in a difficult position.
If you've been laid off from your job due to forces beyond your control, that is certainly not your fault. Many hard-working, loyal employees have lost their jobs at companies they worked at for years for reasons unrelated to their job performance.
Homeowners have missed work because they were grieving the death of a family member, or they were receiving treatment for a physical or mental illness. In addition to the financial costs of dealing with these events, the time away from work means lost income. Money is lost coming and going, and it's no wonder that people experiencing these hardships can fall behind on their mortgage. The good news is that your mortgage lender can take the issues you've had into consideration when evaluating you for a loan modification.
The cause of your hardship is not the bank's primary concern. What's important to the bank is that the hardship is over, or will be over when they modify your loan. They want to see that the problems that caused you to get into trouble have been resolved, that you're in a position to get back on track, and that you deserve better terms.
It is worth noting that the hardship letter is only one of the required items in your loan modification application, and you can be denied for many reasons. The best letter in the world does not guarantee success, but it is a necessary piece of the puzzle, and can help the bank to see you as a real person instead of just a faceless name that owes them money.
If you want to write your hardship letter by yourself, it's important to avoid common mistakes, such as writing too much, or failing to understand the bank's point of view.
Whether you write your hardship letter on your own or not, you should still consider consulting with an experienced attorney to help you through the loan modification application process. Although getting a loan modification approved is never a guarantee, you can increase your odds by working with a law firm that thoroughly understands the process and has a proven record. Using the services of a foreclosure defense law firm allows you to present your best self to the bank, and frees you to recover from your hardships and work on improving your situation.
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