Don't write that loan modification hardship letter until you learn the best way to explain your circumstances and gain your lender's empathy and most importantly, their cooperation. The key reason to qualify for a loan mod is because you are suffering a financial hardship situation, and this is making your current mortgage payment unaffordable. The only way your lender will understand your circumstances is for you to write a brief but compelling description and include it in your application. Here are some good and bad hardship letter examples from homeowners that may help you to write your own.
Although the Affordability and Stability Plan will allocate $75 billion dollars to aid borrowers facing hardships and falling behind their payment schedules, not all will be able to benefit from the program. The program is solely voluntary for homeowners and it gives lenders the right to chose who will be able to participate in the loan modification program and who won't. There will be certain incentives provided to lenders by the Federal government, however in the end the final decision will be made by each bank. The stimulus plan will require each homeowner to gather and present certain documentation and complete the loan modification forms in order to be considered for eligibility.
We have no other option but to request your help and modify the terms of our home loan to a more affordable monthly payment. We are hard working, responsible people but through no fault of our own we are facing the possibility of losing our home. We would sincerely appreciate your help and are respectfully requesting consideration for HAMP and a low, affordable mortgage payment so that we do not lose our family's home. Hardship Letter for Loan Modification - Bad Example: I would like to get approved for a loan modification to lower my interest rate on my mortgage loan. It is just too high and the current interest rates are much lower than what I currently have. My neighbor just got a loan mod and his rate is only 2% - I would like that rate too. My home is not worth what I owe on it, and I could just walk away but I think it would be in your best interest to help me stay here and keep making payments.
I am requesting that you lower my loan balance so that it equals the current value. I put a lot of money down and it makes me really upset that I lost it all. The bank would lose a lot of money if they foreclosed on me, and so I think it just makes sense to lower my interest rate and reduce the loan balance to encourage me to keep my home. It is not fair that people who don't pay their mortgage get a lower interest rate than people like me who keep paying. You banks got a lot of money from the government and that is my tax dollars, so you should help me too. TIPS to Write an Effective Hardship Letter for Loan Modification: Remember that you are asking your bank to lose money, and that is not something they will do easily. It is up to you as the homeowner to prove to them that you are a qualified loan mod candidate by providing them with a legitimate financial hardship situation explanation. This is where a well written letter is so important.
Also, if you are a third party modification help company and you are advertising that a loan modification will not affect your credit score ( I see plenty of them saying it) I suggest you stop advertising that, as you are misleading the general homeowners that are involved in a loan modification. Change it to say that your score may or may not be affected by a loan modification process, each Lender/ Servicing Company reports differently to credit agencies and it's at there discretion on how it will be reported.
Although the Affordability and Stability Plan will allocate $75 billion dollars to aid borrowers facing hardships and falling behind their payment schedules, not all will be able to benefit from the program. The program is solely voluntary for homeowners and it gives lenders the right to chose who will be able to participate in the loan modification program and who won't. There will be certain incentives provided to lenders by the Federal government, however in the end the final decision will be made by each bank. The stimulus plan will require each homeowner to gather and present certain documentation and complete the loan modification forms in order to be considered for eligibility.
We have no other option but to request your help and modify the terms of our home loan to a more affordable monthly payment. We are hard working, responsible people but through no fault of our own we are facing the possibility of losing our home. We would sincerely appreciate your help and are respectfully requesting consideration for HAMP and a low, affordable mortgage payment so that we do not lose our family's home. Hardship Letter for Loan Modification - Bad Example: I would like to get approved for a loan modification to lower my interest rate on my mortgage loan. It is just too high and the current interest rates are much lower than what I currently have. My neighbor just got a loan mod and his rate is only 2% - I would like that rate too. My home is not worth what I owe on it, and I could just walk away but I think it would be in your best interest to help me stay here and keep making payments.
I am requesting that you lower my loan balance so that it equals the current value. I put a lot of money down and it makes me really upset that I lost it all. The bank would lose a lot of money if they foreclosed on me, and so I think it just makes sense to lower my interest rate and reduce the loan balance to encourage me to keep my home. It is not fair that people who don't pay their mortgage get a lower interest rate than people like me who keep paying. You banks got a lot of money from the government and that is my tax dollars, so you should help me too. TIPS to Write an Effective Hardship Letter for Loan Modification: Remember that you are asking your bank to lose money, and that is not something they will do easily. It is up to you as the homeowner to prove to them that you are a qualified loan mod candidate by providing them with a legitimate financial hardship situation explanation. This is where a well written letter is so important.
Also, if you are a third party modification help company and you are advertising that a loan modification will not affect your credit score ( I see plenty of them saying it) I suggest you stop advertising that, as you are misleading the general homeowners that are involved in a loan modification. Change it to say that your score may or may not be affected by a loan modification process, each Lender/ Servicing Company reports differently to credit agencies and it's at there discretion on how it will be reported.
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