Walter Sigmore

Writing an Effective Loan Modification Hardship Letter



Posted: Tuesday, September 08, 2009

by Walter Sigmore

Don't continue to struggle with meeting your monthly home loan payments. You can work with your len
der to apply for a mortgage loan modification with the goal of reducing your monthly mortgage payment either through an interest rate reduction or extension of the number of years on the loan. As part of the loan application process, you will be required to fully explain your circumstances and give valid reasons why you should be considered for a modification in the form of a hardship letter.

Why are you in the situation that you're in? Did you or a family member become ill and incur exorbitant medical bills? Were you involved in an accident or injury preventing you from being able to work? Were you downsized or laid off from your job? Any of these reasons (and others) is valid and all you need to do is explain in detail to your lender what circumstances led to your financial hardship.

When did your financial hardship begin? Lay out a time line for your lender showing them that you never had any late payment or missed payments until the unfortunate circumstances you described above occurred. Take the opportunity to demonstrate to your lender that you had a good credit history and track record up until you ran into extenuating circumstances.

Finally, explain to your bank or mortgage lender what actions you are willing to take in order to remedy your financial situation. Are you going to cancel your gym membership or sell off that extra car? Show them that you're willing to do whatever it takes and set a budget and stick with it.

Be sure to tell your lender that you and your family are committed to home ownership and if you are involved in volunteer activities in your community, list those in your letter to demonstrate that you plan to stay a responsible and active member in your neighborhood.

For detailed facts and essential tips about how you can get approved for a loan modification, visit this simple, easy to understand loan modification guide and resource: Home Loan Modifications
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