Loan Modification Hardship Letter Tips And Advice

Published: 11th February 2010
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A Loan Modification Hardship Letter will paint a picture of your family's current financial position. The federal stimulus plan requires that you simply be facing a hardship situation in order to be eligible to apply for a mortgage workout. This very aggressive program features interest rates as low as 2%, loan terms up to 40 years, and in some cases part of your principal balance may be deferred or forgiven to help you stay in your house.

This is your opportunity to explain to your lender the circumstances that caused the hardship and what steps have been taken to deal with the problem. A compelling Loan Modification Hardship Letter tells the lender whether your family has experienced an "acceptable hardship" and can assure the bank that if given the chance, the home loan payments will be paid on time from now on.

What is an acceptable hardship? Listed here are the generally acceptable hardships:

1. Loss of job or reduction in income

2. Death from the homeowner, spouse or family member

3. Illness of homeowner or family member

4. Divorce or separation

5. Forced job relocation by employer

6. Adjustable rate reset-payment shock

7. increased expenses

So, how do you write a convincing loan modification hardship letter that's concise but also tells the lender everything they should know about your family's circumstance? Keep in mind that lenders are inundated with frantic homeowners trying to find an affordable alternative to maintain their home. They have heard and seen it all, so here are some ideas for a successful Loan Modification Hardship Letter:

Don't be too long winded- 1 to 2 pages at the most

First, describe the hardship and also the circumstances that caused it - make sure that you contain the approximate time frame that you very first began to experience difficulties. This ought to tie in with any late payments you may have. Establish the connection between the circumstances and any delinquencies

Explain what steps have been taken to correct the situation

Provide the lender with your plan to get back on track and stay there

* Assure the lender that you are a responsible homeowner who just needs a second possibility and that you're very motivated to save your home-provide a few details about your involvement within the community. Briefly tell about your child's school or sports activities, your church involvement-lenders are concerned about maintaining the integrity of neighborhoods and communities

Millions of homeowners are in the same boat-how you select to deal with your present situation makes the difference among success and failure. Informed and proactive home owners can work directly with their lender to successfully lower their rate, modify the term, or reduce principle to arrive at a new lower monthly payment. You don't need a lot of knowledge, just some knowledge about the procedure and how it works-you could save thousands of dollars. Take advantage of a software program plan designed just for home owners that does all the calculations for you-avoid costly mistakes.

Watch Out! Writing a convincing hardship letter is just one part from the loan modification application. You'll also be asked to show your income documentation and complete a economic statement. Prior to you contact your lender about a loan modification, get informed and be armed using the insider information and negotiating tips that give you a fighting possibility of achievement. Discover the approval guidelines for the Obama stimulus house saver plan before you total your application. There is a standard 4 step formula lenders use to determine if you qualify-you can discover and use this very same formula to make sure you fine tune your application and qualify for help.

For assistance with your loan modification, please visit the links below. These companies will not charge you unless you get a loan modification.

For a list of the best loan modification companies, visit loan modification or loan modification company. Success base with no upfront fees.

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