Factors to Consider When Writing a Sample Hardship Letter
A letter that gives details on your inability to pay your mortgage to avoid foreclosure is known as a hardship letter. In case your situation is the same, the bank will permit you to continue staying in your home. Cases of illness, loss of employment or reduced income will make you qualify for hardship. In case you are unable to pay your mortgage, the bank may modify your current mortgage to reduce their interest rates or sell your house in a short sale. Your hardship letter should contain all the hardships you are facing.
Some people are usually unable to put down all their hardships on paper. The letter should never include statements of how you think your life is going to improve. When the bank sees that your current situation may soon be over, they will refrain from giving you a loan. Make sure you show some responsibility by explaining to the bank that at some point in the future you might be able to repay your rent. IT is easier for the bank to understand the level of income loss you have undergone if you use figures and percentages. In case you are borrowing money, tell the bank the amount and the source. When writing the letter, it is advisable to exaggerate the level of financial crisis you are going through. Below are the things you should put into considerations as you write a hardship letter.
The bank may fail to believe your story if it is obvious. Explaining that your house value has reduced and that your mortgage value is more than the value of your house will hardly convince the bank. Include details about the changes in your financial situation since you got the mortgage. In an instance where you are forced to relocate because of your job, inform the bank of your urgency to move. In case your mortgage is adjustable, you can use the increasing interest rates as a factor.
Make sure your letter is as simple as possible with all the required information. Always aim at convincing the bank that your financial situation is wanting. Make it sound like you are in a dire situation. Assume you are talking directly to the banker when writing the letter. You can consider consulting an attorney to enlighten you on the options available. There could be other options for you depending on your hardship other than loan modification and short sale.
Make sure that you avoid prioritizing loan modification or short sale. It is advisable to show the bank that you tried other ways of resolving your financial problems before coming to them. It is recommended that you show the bank that you are making an effort to find another job in case you lost your previous one.