A mortgage hardship letter must be prepared properly, or your lender may not approve your mortgage modification request. You could end up losing your home to foreclosure. Most people are unfamiliar with writing a mortgage hardship letter and don’t understand what is required. Before you write the letter, talk to your lender to find out what information they need from you. Do some research. There is plenty of free information on the Internet. You may also want to consult with an attorney.
Errors to Avoid?
Lenders want to make sure you have sufficient income to make your new payment so you don't default on your mortgage again. They want to see your financial information to make sure you qualify for the modification. Here are some common errors that you should avoid making when you prepare your letter:
- Not calculating your debt to income ratio. To make this calculation, just divide your house payment by your gross monthly income. Your new mortgage payment cannot exceed 31% of your gross income.
- Not submitting all your required financial information such as bank statements, paycheck stubs, income tax returns, W-2’s or 1099’s. This will delay the process.
- Sending the letter to the wrong person. Even if you write the best letter in the world, if you don’t send it to the right department or to the attention of the correct person, it may get lost. You may have to start the process all over again wasting valuable time.
- Not clearly stating your financial hardship, and when you expect your financial situation to improve.
- Forgetting to list your contact information, the last 4 numbers of your social security information, the names of all other borrowers and their contact information and your loan number. Without the information, the lender may disregard the letter.
- Not providing the name and contact information of your authorized representative such as your attorney, and letting your lender know where to send correspondence. This could delay information getting to your representative in a timely manner.
You should educate yourself about the mortgage modification process so you have a clear understanding. This way you will avoid making mistakes by providing your lender with the information that need. You will have a better chance that your lender will be read your letter and approve your mortgage modification. You only get once chance to obtain a mortgage modification, so you need to make the most of the opportunity.
Hire an Attorney
Writing a hardship letter takes experience and skill. It is recommended that you hire a real estate foreclosure defense attorney to help you prepare the letter and handle the mortgage modification negotiations with your lender. You will get better results by using a foreclosure defense attorney.
