Loan Modification is an optimal choice for struggling homeowners, especially if refinancing is not an option. One of the first steps in requesting a loan modification is submitting a hardship letter which outlines your financial situation and why you need help.
Things You'll Need
- Important Documents
- Word Processing
While trying to keep your letter short, don't risk being too vague. Be sure to include all necessary information and documents such as medical receipts; death certificates; unemployment notices; etc.
Write with some feeling and emotion.
Identify the reasons for your failure to keep up with your monthly payments, including any DATES which coincide with the delinquency period.
Tell your lender what you want: a lower interest rate; a longer loan term; etc. You may even want to list a proposed monthly mortgage amount that you know you can handle.
Show a willingness to work out an equitable solution - never be confrontational
Be polite: always thank the lender for his/her time and consideration.
Include your current contact information.
Enclose bank statements from the past two months, late notices on your car, last year's tax returns, and anything else you can find that can verify your financial state.
Tips & Warnings
- The absolute best (and most productive) hardship letters are short and truthful. They avoid going into too much detail, opting instead for a simple explanation and resolution request. Saying something as simple as "due to the recent interest rate readjustment on my mortgage and decreased hours at my job, I'm finding it difficult to keep up with my new higher payments," may be all that's necessary to get what you want. Lenders know how tough it is right now and they don't need any lengthy explanations.
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