[Safford]

O.K., here's my first cut at a hardship letter...any suggestions/feedback?

Dear:

I operate a non-profit organization, XXXXXXXXXXXXX Inc.,that provides quality housing for adults with disabilities. The properties that are financed with you allow our clients to live in a stable, welcoming environment. We are committed to retaining these properties and doing whatever is necessary to avoid any trauma our residents might experience if the properties were lost to foreclosure.

As a result of local and state budget cuts, interest rate and payment increases, shifts in the economy, and some major property repair bills, we have fallen two years behind on our property taxes and are behind on other business expenses. We have used all available resources to keep our mortgage payment current but this has meant that we have been forced to get behind on other expenses. We have now hit the wall financially and are very concerned that we will have to default on the mortgages if we can’t work something out.

We have worked hard to maintain strong credit scores (700’s) in the hopes we could refinance into current low rates (5% range). However, our properties have dropped in value by approximately 20%-25%, making the loan balances substaintially higher than the existing property values. So, even with good credit and income there are no loans available at this time.

In addition to maintaining good credit, we have completely re-organized our business and reduced expenses. To accomplish this, we’ve had to lay off employees, aggressively promote our housing, replace some staff with volunteers and interns from the local university, and cut costs everywhere possible. With these changes we are able to cover basic operating expenses. However, we don’t see any possible way to catch up on our back due taxes, other outstanding expenses, and address important maintenance that has been put off because of our situation (the roofs are leaking and need replacing and several other important maintenance issues). In addition, the budget cuts have meant eliminating meaningful services that allowed for an improved quality of life for our residents.

We had intended to hold onto the property for 20+ years and still hope we can fulfill that commitment, but we need some help. We really need your help in the following ways: 1) provide a 2-3 month forbearance, giving us time to complete a loan modification, 2) bring property taxes current, 3) set up an escrow account, 4) reduce our interest rate to 5% fixed for the remaining term, and 5) if at all possible, reduce the loan balance to the current market value of the properties.

We appreciate your consideration and are very open to any creative solutions you might have. Please feel free to contact me with any questions and/or additional information you might need.

Sincerely,