| In today's unstable economy, many homeowners are | | | | To prove financial adversity, a hardship letter must be |
| facing the possibility of foreclosure. Foreclosure allows | | | | submitted to the financial institution that holds the |
| lenders to seize control of the property that payment | | | | mortgage. The letter should be brief and focus on the |
| is defaulted on. Because many mortgages are not | | | | details concerning the financial difficulty. Proof of |
| being paid due to the recession and other hardships, a | | | | income, bank statements, budget description, divorce |
| considerable number of people are losing their homes. | | | | decree, and medical statements should be submitted |
| The federal government has developed a program | | | | with the letter. The letter should not be a sympathy |
| that assists homeowners with their mortgage | | | | plea. It should clearly state the request for modification |
| payments by changing some of the terms on the loan. | | | | of the payment and the vow to meet each payment |
| The Hardship Loan Modification Program allows | | | | due date. A request for a specific monthly amount |
| homeowners to collaborate with lenders, so they can | | | | should also be mentioned. If a foreclosure has already |
| alter the original mortgage contract. New negotiations | | | | been threatened, it is best to enlist the help of a |
| of a mortgage may include lower interest rates, | | | | mortgage counselor, so the form gets filed quickly and |
| adjustment of variable or fixed rates, deferred | | | | properly. |
| payments, or changes regarding interest-only | | | | If the hardship letter is submitted correctly, there should |
| payments. The goal of the revision is to lower the | | | | be no difficulties gaining approval. Because of the |
| monthly mortgage expense and make it affordable. A | | | | decrease in property values, many lenders would |
| loan mod is a renegotiation, therefore the old | | | | rather modify loans than foreclose on low-value |
| agreement is no longer legally valid. | | | | property. Once the approval is met, the lender will |
| To qualify for a modified loan, a homeowner must | | | | work with the homeowner on drawing up a new |
| have proof of hardship. Financial difficulties due to job | | | | contract. The old mortgage may be refinanced |
| loss, pay cuts, divorce, and health problems will qualify | | | | completely, or some of the terms may be changed. |
| a person for a load modification. Many lenders will | | | | Hardship loan modification can help many people facing |
| consider making adjustments if the interest rate | | | | property foreclosure. It is a simple solution that can get |
| drastically increased because of a variable rate | | | | homeowners on the right financial track. |
| agreement. | | | | |