Hardship letters can often make or break your efforts to short sell your home or applying for a loan modification. Banks will normally take into consideration how you express your hardship thru the letter. They will see if you really are affected by a hardship.
So how do get an approval for your loan modification? By providing the proper hardship letter of course!
To start your letter writing, here are some helpful tips:
First of all, think about your current hardship and write down every possible idea that comes to mind on why you can no longer afford your house.
Examine the possible sources of your financial difficulties:
- Medical bills
- Unexpected loss of job
- Credit card debt
- Increased property taxes
Additionally, provide anything else which has greatly affected your ability to continue to pay for the house under the current arrangement with the bank. Doing so can help you to compose a quality mortgage hardship letter.
Now you are prepared to start writing a hardship letter, keep your letter short, preferably just a single page and in paragraph form. Banks don’t have time to read novels as to why you’re having a difficult time making your payments.
- At the top of your letter, the bank’s name should appear. Indicate there why you are asking for a short sale.
- 2nd line place the bank’s address
- 3rdline should be phone or fax number
- Current date on the fourth line
- 5th line you may type: “RE: Request for Short Sale”.
- Lastly, indicate your loan number and your property address then skip a single line before starting your letter
- The salutation should indicate “Dear (Bank’s Name) Representative.
In the first paragraph of your hardship letter, directly state the change. Write down the changes that occurred and the reasons why you’re having a difficult time making your payments. Be brief and to the point as much as possible.
Moreover, your financial hardship letter should also provide explanations with concrete details.
Example – Maybe your house is not strategically located and this resulted in the decline of your homes value, or you noticed there are many foreclosures on your street and this has directly prevented you from getting a fair offer.
If you’re going to indicate your income can no longer accommodate mortgage payments, make sure you have the documents to prove it.
Finally, in the last paragraph of the letter, you should clearly indicate that you can no longer afford to pay for your property, thus you’re considering a short sale because you are left with no other possible option. Honestly state your intent: do you want to keep your house or not?
Do not forget to leave yours or your short sale agent’s contact details. Once completed, sign the letter along with a date and give it to your agent, lawyer, or directly to the bank.