A letter stating financial hardship can help a borrower come out of a difficult situation of foreclosure.
Jan 23, 2019
Letters of financial hardship provide an opportunity for the homeowners to stop the foreclosure. These are a part of the documentation package when they request for a mortgage loan modification. A convincing letter is one of the potential ways to serve the purpose. It's worth a try because at most the mortgage company can reject it.
It is important to access the requirements and write one before its proceedings start. The fact is that the mortgage companies, in most cases, refrain from foreclosing homes, as they lose significant amount of money in the process of selling one at an auction.
In case the homeowner knows that he is going to face a hard time paying the mortgage for next one month or two, he should immediately contact his mortgage lender. This avoids the extra payment of late fees and penalties.
If he feels that it is almost impossible to make payments at its current amount in the long run, a letter to stop foreclosure becomes necessary to stall the big process involved. It should clearly state the reason because of which the homeowner has fallen behind in his mortgage payments.
Necessary documents, along with the copy of his checking account should also be attached in order to prove the hardship. These include:
Financial hardship budget
Income Tax Papers
The homeowner should make a humble request to the mortgage company for the possible modifications, in order to make the payments affordable. A well-written letter plays an important role in this process. If one can convince the lender with substantial proof, it can provide a way out of this difficult situation.
If a homeowner wishes, he can also ask for some time from the mortgage company, in order to find out a suitable buyer for a short sale of his house. Following are some of the points that should be kept in mind while writing one.
A Clear Subject Line
In order to reach the right hands, its subject line should be clear and concise. This also gives the brief idea of what actually it is meant for.
Personalize it to a Limit
It should provide an idea about the hardships the homeowner is facing; however, it should not be his life story. It should make the mortgage company aware of his circumstances, with a valid and genuine reason for the non-payment of the mortgage.
Clarity of the Content
One should try to mention the points that are stated in the clearest form, and make a proper summary in the end. He should not miss out any point, which can play an important role in stopping the foreclosure. It is good to be humble and thankful in tone while writing, as the person reading it is not responsible for the current circumstances.
This letter is also useful for restructuring or consolidation of one's debts. Losing a family home can pose a financial, as well as an emotional setback for anyone. This attachment should be evident from it, in order to regain the family treasure.