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| Hardship Letters For Loan Modification |
August 31, 2010 Barry Sample 1234 Any Street Yourcity, Yourstate 76000-3011 ABC Lender or Servicer Loss Mitigation Department 2345 Any Avenue The City, State 73001-5345 To whom it may concern. Re: Loan modification for Barry Sample This letter details the specifics of my illness and explains why it is difficult for me to continue making the mortgage payments as they now stand. Therefore, I am requesting a loan modification. On April 2, 2008 I was involved in a car accident on my way to work. I was taken by ambulance to the hospital where I remained for three weeks. I received extensive injuries to my right leg, and to my lower back. I was off from work for ten months while I recuperated. I attended the XXZ Rehabilitaion Center where I received therapy four times a week for twelve weeks. My sessions are now reduced to once a week. Under advice from my doctor, I returned to work but only on a part time basis. My duties involve being on my feet and lifting materials. Being on my feet more than five hours a day causes my lower back to spasm and to cause unbearable pain. Instead of 40 hours a week, I am now working 25 hours. My pay has been reduced from $5,000 to $2,900 a month. I am the only income earner in my family of 5. I have been with my company for ten years and the prospect of more hours is good. It depends on the progress and success of my therapy. The house payment takes most of my pay. The mortgage is $1,500, property taxes are $300 and the house insurance is $200, for a total of $2,000. If we can get the mortgage payment down to $1,000 a month I am positive that we can get over this hurdle. My hours will be increasing as I get stronger and this would help tremendously. We hope that you will work with us so that we can continue to have a home for our family. We have been a loyal customer of ABC for over 8 years and would like to remain a customer. Yours truly, Barry Sample Notes: 1. Notice the details in the letter. The accident is well documented. There is honesty in the letter and the reader can visualize this borrower. 2. Pay special attention to the numbers. The pay has been reduced substantially, from $5,000 to $2,900 a month. The monthly payment to the lender is $2,000. This represents 68% of the total income. The lender is looking for 31% and higher. 3. Mention how long you have been a bank customer and how long you had the mortgage with the bank. Don't be arrogant! Notice the closing comments. You want to remain a loyal customer. 4. The letter should reach the Loss Mitigation Department. Therefore, highlight these words on the address envelope. 5. Any change to your mortgage has to viewed as a short term solution, usually about 5 years. Therefore, in the letter we show that we are working, and that we plan to get back to a 40 hour week. 6. Give the lender something to work with. In this case we are asking for $1,000 a month. And based on our income we can handle this. |
| List of Hardships a lender will consider. These are GOOD examples. > ARM reset, payments increased > Long term illness > Loss of job > Job relocation > Death of spouse or co-borrower > Single parent without child support > Military duty > Medical bills > Incarceration BAD examples of hardships. > Credit cards are maxed out. > Divorce > Pending legal issues > Full time student > Threatening to file bankruptcy DOCUMENTS READY TO GO: You will need to prove your case. If you say you have a hardship, then prove it. Have the following documents ready to give the lender. > The last 3 months bank statements > The last 3 pay statements > The last 3 years income tax returns |
| September 1, 2010 Kimberley and Allan Smith 7890 Your Street City, State 75022-1201 XZY Lender Loss Mitigation Department 1234 Any Street City, State 75090-1234 To whom it may concern: Re: Loan modification for Kimberley Smith We are writing to ask you for a loan modification. Our mortgage with XYZ lender is an adjustable rate mortgage. It is due to reset again in six months. Every time our mortgage resets the payment goes up by about $400. The original payment was $1,800 a month. It is currently $3,200. We have used up all our savings and we simply can not continue to make the payments. We would appreciate it very much if you can change our mortgage to a fixed rate mortgage using the current rate for a 30 year fixed mortgage. As you can see from our record all of our payments have been made on time. Any solutions you can suggest would help our family in this time of need. Thanks for your time and consideration to this matter. For further information or if you have any questions please call us at 1-676-555-1234. Respectfully, Kimberley Smith Allan Smith |
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A hardship letter is an appeal to your lender to give you a second chance with your mortgage. You would like to get a better rate, an extended term, or lower payments, then you need a powerful hardship letter. The letter has to convey honesty and it must outline the details of your hardship. The letter might help you avoid foreclosure. |
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