How to Write A Mortgage Hardship letter for 2010

Don't its not that hard

The 2009 hardship letter is a bit different. The banks, government and the consumer are at a place we have never been before. This is not the first time the banks have created a loan that turned around and bit them in the butt. It is not the first time government has bailed out the banks to correct their miscalculation. The consumer has always found themselves in the middle of someone's profit. What is different is the financial environment of the world today. Peter lacks the funds to help us pay Paul. So our approach to the bank may have a different tone and underlying plan.

Things You'll Need

• An open mind
• A plan

Instructions

1. 

   Sit down and assess where you are today. Make a status profile.
   • Where are you in your mortgage, how many months behind and how much to catch up include second mortgages and lines of credit.
   • How much money is coming in?
   • Where are you with your other bills credit cards bank cards?
   • List your bills in a must pay, should pay and may not pay.
   • Household cost list must haves, should have, like to have and what you can do with out.
   • Assets what can you sell to buy your self some time eBay and yard sales.
   • Credit lines cards, equity, friends and family.
   Make it a family project; include the wife and kids if they can understand what's going on. The adults in the family are under stress the kids know something is wrong the more you hide it the more they want to know. Present the situation to them and assure them you have it under control.

2. 

   Determine how you got into this situation. Was it job loss, health, major home repair, transportation problems or change in terms of your loan sub prime, adjustable high cost loans and second mortages? Any of these can take your mortgage to a bad place. You may have one or a combination of these situations. Are they long term or short term? This is the place where you come up with your plan to get out of the situation. This is where you determine can you replace the income is the health condition long or short term. You have to be realistic in this process painfully honest. You can not get out of where you are unless you truly understand how you got there. You may very well decide that you simply have too much mortgage. If that is the case don't worry we can deal with that too

3. Step three What do you want? Do you want to keep the house? Do you want to sell it? Do you need to buy your self some time to find some place else to live? You know what you have and how you got here what you want to do will govern how you work with your lender.
   The lender has one objective that is to get a return on their investment. They will continue to work with you as long as they feel they can achieve that end.
   If your intention is to keep the house then look at your income and your adjusted expenses. If you feel comfortable with that then you can look at programs that are available to keep your home. You may be able to get a loan modification, a refinance, forbearance agreement or even chapter 13 bankruptcy.
   If your intention is to sell the house talk to some Realtor and get a feel for the market. Interview some Realtor and have them give you a market analysis on your home. If you have a good plan your lender may suspend your payments to give you time to put the house on the market. They may be willing to take a short sale and assist with the realtor commission. Often they have a preferred realtor in your area that they work with. This option makes the lender feel safe knowing the property is being taken care of and they may still get a return on their investment.
   What if you have decided you have had enough? You are ready to walk away but need some time to prepare. Most important don't share that with your lender. Make sure you keep the lines of commutations open, know what you are going to say. I don't advise you to lie but give them answers they want to hear. Most important if this is your decision remembers most lenders can live with you being sixty days late. When you hit the ninety day late point expect to get the intention to accelerate letter and your forty five day notice. At this point they may be only being willing to take the total to bring the loan current from you. At this point you may have two to three months before the Sheriff puts the notice on your door another month for the hearing and then a month for the sale. You have about four months to get your act together and move on.
   What ever you decide remember the sixty day window. Do what ever you can to stay within that window because if you don't it will cost you a lot of money. When your file is passed to the lawyer you will be saddled with their fees and that can amount to five thousand or more.

4. 

   Lets write the letter
   Keep the letter short long sad stores will fall on deaf ears. Comments on the economy , politics and the unfair nature of predatory loans have no place in this communication. Write a few drafts of the letter and edit, edit, edit until you feel comfortable with it.
   Your hardship letter is a negotiation first and a explanation second. They have heard all the sob stories already. You do want to give them a brief explanation of how you got there. Be careful, this is not a dear Abbey letter. If you make your situation too dire they may feel that you can't recover and they need to cut their losses. Your letter should convey the problem and your solution. If you had a reduction in income explain that you have adjusted the family budget or your spouse has taken on another job to take up the slack in the income. Make it clear that you have a plan and simply need their assistance to get you out of the current situation.
   Negotiation is the key to a successful hardship letter. Know what you want, are you looking for a payment arraignment. This is usually a short term arraignment where what you owe is divided by three to six months and added to your regular payment. Be cachous with this, if you are having problems meeting your regular payment you may be agreeing to a payment you can not make. If this is your plan offer them an arrangement you can afford. Remember the sixty day window, try to get them to accept a payment to keep you within that window. Then you can make extra payments to bring your loan up to date, for example an extra hundred dollars will begin to bring your loan current in time.
   Loan modification; do the research, Google your lender with the current bailout many are offering programs to keep people in their homes. If you find that Google turns up nothing include in your letter a question that ask if they are offering any program like the other lender. This demonstrates to them that you are informed and may spur their competitive juices to show that they are as good or better than the competition. Even if this is your intention I remind you to remember the sixty day window.
   If you are ready to walk away what should you do? I have already given you a tentative time line and many banks and cities have placed a moratorium on foreclosures but that will not last long. If you intend to continue making payments should focus on staying within the sixty day window. Your objective here is to buy time. Th

5. Why is the hardship letter a bit different in 2010?
   The environments today seems focused on the concept of "Bail Out" so far it has been big business. But, the money is coming from the little guy. The mortgage industry has been blamed for starting this whole thing. That can and will be debated for years to come. Relief has been coming a little at a time. Keep a close eye on bankruptcy law proposed changes will help many people keep their homes. We can expect that there will be some massive efforts to keep people in their homes and jump start the housing industry.
   I have mentioned the sixty day window throughout this article. The reason for that is we do not know what programs are coming. Even some of the banks are putting foreclosures on hold until they see what the stimulus package and other programs are in the pipe. Unless you are almost out of your home I suggest you put your mortgage company off as long as you can. You must stay on top of what is going on in the mortgage industry. Watch the business news, read the business sections of the paper stay online and see what the government is offering. This is not going to be a immediate fix there will be some trial and error to derive a solution. The first ones may back fire so bide your time this year will be one that will offer many options to troubled borrowers if you can hold out for the right solution for you.
   I have not given you any examples of a letter for a good reason. The letter should be yours. Not some form letter where you fill in the blanks. I suggest that you legibly hand write the letter this will make you stand out. It brings a personal connection to you and the reader. This is one of the few places left where it is a person not a computer that you are dealing with. Now don't put tear stains on but keep it cordial.

6. 

   There are no quick fixes. Beware of people that send you letters wanting to help you save your home. Most of these people can do you more harm than good. If you have no equity in your home they can only rip you off. If you do have equity you can go to the bank and use it on your own. Credit repair is not for you. You can better your credit situation on your own by simply using good business acumen. You can also use one of the nonprofit credit counseling organizations to help. Use common sense and don't become a victim.
   Good Luck
   Anthony Alarcon
   GOD's Blessings Require Your Participation

Tips & Warnings

• Stay in touch with your lender.

• Did I say answer your lenders calls

• Do not ignore your lenders letters

• Pay attention to what is going on in the mortgage industry

• Stay in touch with your lender.

• Stay away from any one that contacts you about saving your home

• There is no such thing as credit repair

Resources

• HUD foreclosure link
• NACA refi program