If you are having trouble making your monthly mortgage payments, you need to write a convincing financial hardship letter to your lender to get their attention so they will negotiate with you. The financial hardship letter lets your lender know your financial situation and your intentions. This way, your lender can help you work out some other option to save your home from foreclosure. You should also speak to a foreclosure defense attorney about assisting you with writing the letter and negotiating with your lender.
Elements of a Good Letter
The more convincing your letter is the better chance you have in getting the results you want. Be honest and clear. A good letter should contain the following items:
- Your name, address, telephone number
- Your loan number
- Nature of your financial hardship. Common hardships are loss of income, loss of job, disability, death in the family, divorce or a natural disaster such as a hurricane or earthquake.
- Amount of payment that you can afford
- When you expect your financial situation to improve
- Your intentions. Be crystal clear as to whether you want to keep your home or need to sell it.
- Attach copies of recent comparable sales in your area if the value of your home has declined.
- State what you are asking for such as a mortgage modification, reinstatement, refinance, deed in lieu, forbearance or short sale.
- Provide your representative’s name and contact information.
It’s a good idea to attach documentation supporting your financial hardship. You will need to give your lender a list of your assets, debts and liabilities. The lender will require employment verification, paycheck stubs, W’2’s, 1099’s, tax returns and bank statements.
Qualifying
After your lender reviews your hardship letter and supporting documents, they will let you know what options or programs you qualify for. Be patient, because the lender may not get back to you right away. If you are in default, your lender could institute foreclosure proceedings against you. The hardship letter should help you stop the foreclosure proceedings. Don’t assume anything though. Just keep following up with your lender, and don’t ignore any correspondence, notice or telephone calls from your lender. If you receive a foreclosure notice, you should contact your attorney right away.
Attorney
Your attorney can also advise you of your options as well, and help you with a foreclosure defense by representing you in court and negotiating with your lender. The lender will take your requests more seriously if you have an attorney representing you. Also, you will get better results using an attorney.
