| A Loan Modification Hardship Letter will paint a picture | | | | payments you may have. Establish the connection |
| of your family's current financial position. The federal | | | | between the circumstances and any delinquencies |
| stimulus plan requires that you be facing a hardship | | | | - Explain what steps have been taken to correct the |
| situation in order to be eligible to apply for a loan | | | | situation |
| workout. This very aggressive program features | | | | - Provide the lender with your plan to get back on |
| interest rates as low as 2%, loan terms up to 40 | | | | track and stay there |
| years, and in some cases part of your principal | | | | - Assure the lender that you are a responsible |
| balance may be deferred or forgiven to help you stay | | | | homeowner who just needs a second chance and |
| in your home. | | | | that you are very motivated to save your |
| This is your opportunity to explain to your lender the | | | | home-provide a few details about your involvement in |
| circumstances that caused the hardship and what | | | | the community. Briefly tell about your child's school or |
| steps have been taken to deal with the problem. A | | | | sports activities, your church involvement-lenders are |
| compelling Loan Modification Hardship Letter tells the | | | | concerned about maintaining the integrity of |
| lender whether your family has experienced an | | | | neighborhoods and communities |
| "acceptable hardship" and can assure the bank that if | | | | Millions of homeowners are in the same boat-how you |
| given the chance, the home loan payments will be paid | | | | choose to deal with your current situation makes the |
| on time from now on. | | | | difference between success and failure. Informed and |
| What is an acceptable hardship? Here are the | | | | proactive homeowners can work directly with their |
| generally acceptable hardships: | | | | lender to successfully lower their rate, modify the term, |
| 1. Loss of job or reduction in income | | | | or reduce principle to arrive at a new lower monthly |
| 2. Death of the homeowner, spouse or family member | | | | payment. You don't need a lot of experience, just |
| 3. Illness of homeowner or family member | | | | some knowledge about the process and how it |
| 4. Divorce or separation | | | | works-you could save thousands of dollars. Take |
| 5. Forced job relocation by employer | | | | advantage of a software program designed just for |
| 6. Adjustable rate reset-payment shock | | | | homeowners that does all the calculations for |
| 7. increased expenses | | | | you-avoid costly mistakes. |
| So, how do you write a convincing loan modification | | | | BEWARE! Writing a convincing hardship letter is just |
| hardship letter that is concise but also tells the lender | | | | one part of the loan modification application. You will |
| everything they should know about your family's | | | | also be asked to show your income documentation |
| situation? Keep in mind that lenders are inundated with | | | | and complete a financial statement. Before you |
| frantic homeowners trying to find an affordable | | | | contact your lender about a loan modification, get |
| alternative to keep their home. They have heard and | | | | informed and be armed with the insider information and |
| seen it all, so here are some tips for a successful Loan | | | | negotiating tips that give you a fighting chance of |
| Modification Hardship Letter: | | | | success. Learn the approval guidelines for the Obama |
| - Don't be too long winded- 1 to 2 pages at the most | | | | stimulus home saver plan before you complete your |
| - First, describe the hardship and the circumstances | | | | application. There is a standard 4 step formula lenders |
| that caused it - make sure that you include the | | | | use to determine if you qualify-you can learn and use |
| approximate time frame that you first began to | | | | this very same formula to make sure you fine tune |
| experience difficulties. This should tie in with any late | | | | your application and qualify for help. |