Sample of How to Write a Financial
Hardship Letter
Once you have decided to contact the creditor, learning how to write
a hardship letter and then submitting it can be your best choice to a
loan modification. Although there are many different situations that can
warrant the need for a hardship letter, two of the most common
situations these days are:
- You can try and consolidate your debt by contacting credit card
company or bank and doing a complete restructure of your finances.
- A short sale on your house can only be done once you have officially
requested this in writing from your mortgage holder.
- A loan modification through the Making Home Affordable Obama
Mortgage Program can also be strong reason to write a financial hardship
letter.
Additional any one of these hardships may also trigger for a
hardship letter.
- You may need one to request that an insurance company cover the
cost of an unusual medical treatment or procedure
- If you're going to request the university or college reduce their
admission fees due to special circumstances.
- If you're going to make an appeal to a hospital or medical care
provider to reduce their billings for compassionate reasons.
Below we've included some free additional tips on exactly what you
need to do in order to write a successful financial hardship letter.
While writing your letter keep in mind that regardless of the situation,
some important guidelines should be followed if you want the hardship
letter to be taken seriously:
- Problem must be clearly stated - right from the
beginning of the letter you'll need to summarize your specific situation
has prompted you to write this
financial hardship letter. You will be able to give more details on
this in the later paragraphs of the letter
.
- Kiss your mortgage companies behind - in the letter
do not get into a blame game, if you're writing this letter it is
because you are in serious financial trouble and this is more than
likely your last resort. Be respectful and thank whoever you are
addressing the letter to in advance for considering your situation.
- Do not write more than one page - If it is make sure to
shorten the letter to just a few paragraphs. A letter that wanders for pages
will water down your case and you will lose the attention of the reader.
- Try to make it a tear jerker - You want to make the
letter as personal as possible, try and grab at the heart of the fellow
human being who will be reading this.
- Right from the get go - You should state exactly what
you are requesting. Make sure to reiterate this request in a slightly
different matter at the end of the letter.
- Give all the information - your letter should
provide enough details so that the mortgage lender is able to easily
understand your particular situation. Attach documents as needed these
should include bank statements, incomes tax statements and letters and
current pay stubs.
Foreclosures can take up to a year or more. The length of time
depends on what state you live in and even foreclosures within the same
state will often have different
timelines
until the actual sale.
The mortgage lender or bank will often issue the state of claim once
you have missed three mortgage payment this will be questioning your
ability to pay the mortgage. Once the statement of claim has been served
the second phase of the foreclosure has begun. Again, time frames can
vary widely, but generally this will take up to six months. Once you get
to the end of the third step the order of sale has begun.
Many homeowners, especially in today's market are not serious about
saving their home. The main reason behind this is that many Americans
are upside down in their homes by hundreds of thousands of dollars. Once
a homeowner emotional detaches themselves from the house and is able to
look at their financial situation, they are able to realize that the
home will likely not be worth what they owe for decades to come. For
some the best solution is to try and work a
short sale out
with the lender.
A sample of how to write a financial
hardship letter
is included below and something many mortgage companies
require you to complete in order to consider you for loan mediation or
what's called a work out. This is your chance to appeal, it is not the
time to complain about what they have or have not done to make your
situation worse.
The letter needs be honest and represent the facts
clearly. It should prove to them that the situation
which originally caused you to fall behind on the loan
payments was temporary and you are now in a better position
to make your payments on time.
Your also going to need a legitimate excuse for falling
behind, such as loss of a job, death in the family or an
illness would be an acceptable reason to temporarily fall
behind on your mortgage.
Please remember the
free sample of how to write a financial hardship letter
below is to be used only as a guide. You should delete
all information which is not relevant to your situation,
inserting your own details where necessary.
(Company's representative)
(Company's Name)
(Company's Address)
(Company's phone number)
RE: (Home Address)
Account Number:(#)
Dear (Ms/Mr. Brown:)
I/We, (Your Name),
are/am requesting that you review my/our financial state of affairs
to see if I/we qualify for a loan workout option.
I/We are having problems making my/our monthly payments because of
financial troubles created by (pick one):
Death of my spouse
Divorce
Job layoff
Separation
Medical bills
Too much debt
Unemployment
Death of a family member
Business failure
Loss of income
Job relocation
Illness
Damage to property
Military service
Payment increase
Incarceration
Other (Please Specify)__________________
This difficulty or situation happened on or about this date MM/DD/YYYY.
I/We believe that my/our situation is (circle one) Temporary / Permanent
This following is a brief account of my/our situation: (explain your
situation and tell them why you feel you can now afford your new
payments/payments)
I/We, (your name), state the information provided above to be true and
correct to the best of my/our knowledge.
Borrower’s Signature
Date
Co-Borrower’s Signature
Date
This sample of how to write a financial
hardship letter is published as a courtesy of MortgageBreakDown.com