[Moe Bedard]

The best way to set up a hardship letter..........

* First, describe the hardship and the circumstances that caused it
* 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 chance and that you are very motivated to save your home.

This is what servicers require for income/expense verification............they may ask for additional items on a case by case basis when verifying the information.

If the borrower is employed:

 A signed copy of the most recently filed federal income tax return, including all schedules and forms, if available,
 A signed IRS Form 4506-T (Request for Transcript of Tax Return), and
 Copies of the two most recent paystubs indicating year-to-date earnings.
 For additional income such as bonuses, commissions, fees, housing allowances, tips and overtime, a servicer must obtain a letter from the employer or other reliable third-party documentation indicating that the income will in all probability continue.


If the borrower is self-employed:

 A signed copy of the most recent federal income tax return, including all schedules and forms, if available,
 A signed IRS Form 4506-T (Request for Transcript of Tax Return), and
 The most recent quarterly or year-to-date profit and loss statement for each self-employed borrower.
 Other reliable third-party documentation the borrower voluntarily provides.
Note: For both a salaried or a self-employed borrower, if the borrower does not provide a signed copy of the most recently filed federal income tax return, or if the Compliance Agent so requires, the servicer must submit the Form 4506-T to the IRS to request a transcript of the return.

If the borrower elects to use alimony or child support income to qualify, acceptable documentation includes:
 Photocopies of the divorce decree, separation agreement, or other type of legal written agreement or court decree that provides for the payment of alimony or child support and states the amount of the award and the period of time over which it will be received. Servicers must determine that the income will continue for at least three years.
 Documents supplying reasonably reliable evidence of full, regular and timely payments, such as deposit slips, bank statements or signed federal income tax returns.

If the borrower has other income such as social security, disability or death benefits, or a pension:
 Acceptable documentation includes letters, exhibits, a disability policy or benefits statement from the provider that states the amount, frequency, and duration of the benefit. The servicer must determine that the income will continue for at least three years.
 The servicer must obtain copies of signed federal income tax returns, IRS W-2 forms, or copies of the two most recent bank statements.







If you are going to hire someone to help you with the modification.........they will be able to answer the questions that you have regarding your financials and help you with putting together the modification package for your lender.