The hardship letter is an explanation why a homeowner is delinquent on their mortgage payments, and explaining how certain event or series of events affected their financial situation. This is one of the prerequisite by lending companies in order for them to clarify the situation of a homeowner’s loan modification proposal.
Creating a well written hardship letter would be very helpful for a homeowner in order to give a significant reason for the need to modify an existing loan. The letter must be very specific, backed up by evidence of the hardship, and substantiate that the situation is temporary. The letter needs to be brief and direct to the point.
The letter must state the following:
- Your hardship.
- Your proposal to resolve your debt.
- Thanking them for their time and probable consideration.
- Your current contact information.
Examples of hardship are:
- unemployment
- reduced income
- divorce
- separation
- medical bills
- too much debt
- death of spouse
- death of a family member
- business failure
- job relocation
- illness
- damage to property
- military service
- incarceration
The hardship letter is one of the most crucial elements in your loan modification package. Be cautious, it is important that you get it right and would easily be understood.
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