Examples of a Hardship Letter

[Moe Bedard]

If you live with your fiance, even if she is on the loan alone..........they will include all household income and all household expenses. A modification is a restructure of the rate and term of the original loan so it doesn't work like a refi..........she will still remain on the loan herself after the modification as well.

[khelp]

Could someone give me feedback on if my hardship letter is acceptable? Thanks in advance!

To Whom It May Concern:

I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep ourselves and our children in our home and we would really appreciate the opportunity to do that.

The main reason that caused us to be late and fall behind in our bills is due to the current state of the economy we saw a drop in our monthly income in our small business and also income I earned as a licensed real estate salesperson and Realtor with the State of California. Over the summer when the gasoline prices increased, not only did our personal and business outgoing expenses increased but we experience a sharp drop in business which decreased our income. During this time we experienced an increase in customers bouncing checks for services rendered as well as a loss of long time customers because of their inability to pay for our services. My income as a Realtor is now completely non-existent due to the sub-prime loan crisis, credit freezing, and home sales in my area virtually at a stand still. My husband and I are now living off of one income alone which is the income generated from our small business. Soon after being late and our income not being nearly enough, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed on our adjustable rate interest only mortgage with Aurora Loan Services as well as Bank of America who holds our second mortgage at a high 8.94% interest rate. It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help.

As explained above, in approximately June of this year 2008 our income had severely decreased and our outgoing dramatically increased due to the sharp rise in oil prices. To add insult to injury my Aunt had a debilitating stroke which forced me to take time off from my business to drive down to Burbank, CA to care for her. This situation was only temporary as when oil prices dropped our income has increased again and my Aunt is now in Hospice which has allowed me to go back to work with the reassurance that she is being properly cared for.

We are now desperately trying to recover from months of being in the red financially and are scrambling to pay on bills which had gone in default but we are struggling and cannot seem to catch up due to the high interest rates and payments. Since the purchase of our home, our resale value has declined approximately 20% which has made it impossible to refinance for a lower rate.We have been actively adhering to a strict budget which was developed during a credit counseling session with a Mr. Tony Tran, Certified Consumer Credit Counselor with Consumer Credit Counseling Service of Orange County.Due to our situation improving due to our diligent efforts we believe this is something we can recover from if we only were given a chance. We strongly believe that a loan modification would benefit us in our current situation. Currently our first mortgage through your company Aurora Loan Services is an interest only adjustable rate loan and our second mortgage through Bank of America is fixed but is at an unbearable 8.94%. If we cannot modify these loans by combining them into one mortgage at a low fixed rate we will inevitable lose our home. We would appreciate if you can work with us to lower our payments so we can keep our home and also afford to make amends with your firm by paying our mortgage on time.

We truly hope that you will consider working with us and we are anxious to get this settled so we can recover from our financial losses and look forward to a positive future.

[Moe Bedard]

Hi khelp,

Welcome to the forum and thank you for joining..............

The letter is good.............but the one thing you are asking for a modificaiton will not be able to achieve............

If we cannot modify these loans by combining them into one mortgage at a low fixed rate

The only way that this can be accomplished is through a refinance that will pay the two loans off with one new loan.

A modification is just a restructure of your current loan............so you would need to work on modifying the two loans that you have separately..........it will still leave two separate loans and two separate payments as it is now.

[khelp]

When I had talked to Aurora Loan Services and asked their loan specialist if I could get my two mortgages (the first is through Aurora and my second through Bank of America) combined through modification, the specialist said to request this in my hardship letter. I had also spoke to a friend of mine who is a mortgage broker and he said that this is possible because he has personally seen this happen recently. My friend is the one who when I asked if he thinks I can refi and he said no due to my loan to value ratio, he recommended that I try with a loan modification. He is also the one who told me to ask Aurora if they would be willing to do this.

Well working in the real estate industry myself I know that until it is in writing it does not mean anything but after speaking to Aurora Loan Services I thought that I might request this in the letter per their instructions (the loan specialist). What is your recommendation? Should I leave this out of my letter or leave it in (or can it hurt my chances of a loan modification)?

[Moe Bedard]

Leave it in then...................your mortgage friend must be correct if they have seen this happen through a modification and not a refi........just make sure that you check.........because ALS does do refinances as well.

We have had other members ask the very same thing of their servicers.........even ones whos loans were being serviced by the same servicer and they were not able to have this done. You will have the first modification that was able to combine two separate investor pools with two different servicers, into one modified loan through the modification process and not a refinance. I will be very curious to see how they are going to structure this without a refi.

Please keep us posted............

[khelp]

Well I called Aurora again yesterday just to make sure and this loan specialist said they do NOT and can NOT combine the two mortgages into one and modify. This goes to show how a person can get two different answers from two different employees from the same company. So evidently I will leave this out of the letter. But I do want to check that the rest of the letter is done correctly. Is there anything I should add or take out?? Thanks again in advance!

OH, as everyone knows my 2nd is through B of A and I just saw on their website how they are now refinancing with 10% equity and less in the home if the person refinancing is already a Bank of America customer who holds a mortgage through them. I will be calling on this Monday. If I can somehow refi instead of having to go through the whole modification process I will. I am still getting all the modification paperwork together in the event I cannot. If they are going to request money down to refi I can basically cut that option out. I will let everyone know what I find out!

[Moe Bedard]

The rest of the letter was fine......

[Micro]

Hello everyone, I am having trouble writing a hardship letter. Does anyone have any advise on how to start and end. This can be stressful. I feel so much pressure to write this trying to get approved for this Modification Loan. Following are reason why we fell behind:
1)Adjustable Mortgage Rate increased.
2)Medical Expenses
3)Raise in utility and electrical expenses
4)Credit card expenses

[Moe Bedard]

Micro,


Welcome to the forum and thank you for joining............

These are what most lenders consider to be generally acceptable hardships....

1. Loss of job or reduction in income
2. Death of 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

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.


Here is a link to some examples to help you out...........
Examples of a Hardship Letter

[w.davis]

Can someone help me format a hardship letter based on applying for a modification after a 4 month repayment period?

Our repayment period will be up on 04/15/09 and we are needing to start the process all over again with a negotiator to try and get our loan modified permanently. Our situation was we were never late on payments but we had medical bills piling up along with automobile problems and then our mortgage pymt. would have gone up if it wasn't for the repayment plan because there was a shortage on our home taxes which was added to our original monthly payment and it made our payment go up. We were unable to afford that so we accepted the 4 month repayment plan.

We're at the end now and need to put together a hardship letter again. On 02/16/09 my mother passed away and I ended up having to pay for all the expenses as she didn't have life insurance so we're now back at square one with our debt. Can anyone offer some advice as to how my letter should be worded?

[Moe Bedard]

the format would be the same as the original hardship letter...........just make sure that you explain the last three points here so that the lender will consider you for a more permanent modification versus another forbearance.


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.

[Moe Bedard]

No worries


Just go to this same forum section
Loan Modification - Loan Modification Forum - Loan Safe

and on the top of the forum, left side..........there is a tab that says "new thread" from there it will open a window for you to start the thread.

[JenMBS]

Thanks just did it.

[keyluvs2travel]

Hello,

I have viewed the examples of Hardship letters on this site, however I am not late on my mortgage but will be soon if I don't receive a loan mod. I lost my job over 8 months ago and have depleted a lot of my savings and resources. I just found a part time job but it's not really a lot of money. I am still looking for an additional job. I am eligible for the Obama plan, but how do I write a hardship letter if I have not been late yet.

thanks

[Moe Bedard]

You do not have to be late on your mortgage for a hardship............loss of job/income is a legitimate hardship.........to make it easier for you.........I have outlined the steps to follow to format your hardship letter..............
Hope this helps...........

These are what most lenders consider to be generally acceptable hardships....

1. Loss of job or reduction in income
2. Death of 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



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.

[keyluvs2travel]

Thanks for the footprint! I know how to write the letter. I spoke to my servicer and he suggested I go to the "makinghouseaffordable" website and answer the following questions to see if I qualify. He stated if I did qualify then I needed to write a letter stating why I felt I was eligible for this plan and send the applicable docs. Is this the same as the hardship letter?

[Moe Bedard]

yep......

[NYC_Lover]

I posted my hardship letter in this thread today for input but my post is missing. How did that happen? Did I do something wrong?

[Moe Bedard]

It went into a thread of your own, so that we can follow your story from start to success........
here it is
GMAC MHA Modification

[NYC_Lover]

My very own thread! And with all my posts condensed. Oh, my!

Um, how did I miss it?

Thank you!

[MPDano]

Great Thread!

[MPDano]

These are great examples!

[wach-ntmare]

This is one of the hardest documents I've ever had to write, and the thought that it won't get the desired result makes my stomach turn. Please read below and lend any assistance and/or advice you can.

I write you in an attempt to explain the events that have transpired causing me to become delinquent on my current mortgage.
I was a participant in the 12 month fixed rate loan modification program offered by Wachovia from July 2007 – 2008. During this time I was gainfully employed and benefited from a 6.5% locked rate on my loan. When the product was about to expire I contacted the retail loan department to refinance of my home. The refinance process dragged on for several months with appraisal after appraisal, and adjuster after adjuster with no loan commitment or closing date.
Then in February of 2009 I lost my job which was our primary household income. Our property insurance was due, and I was unable to keep my account current. I have since been approved for unemployment benefits and able to make one of the delinquent payments. My unemployment benefits total $275 per week, and I am vigorously seeking new employment. My wife has started working additional hours to help make ends meet, but our current total household income is approximately $2,250 per month and we are now faced with the our 2008 property taxes and flood insurance payments becoming due within the next month.
We have every intention of meeting our obligation, and are confident that we will be able to do so. However, we have currently exhausted all of our resources and our current income does not allow us to pay our property taxes, and flood insurance, while keeping our account current. It is our hope that you will work with us to prevent any delinquencies while we bring our property taxes and flood insurance current and modifying our loan to create an escrow account and lower our monthly payments. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.fficeffice" />>>

[Moe Bedard]

Hi wach-ntmare,


Welcome to the forum and thank you for joining..........

You may want to contact Wachovia to see if you are able to qualify for the new Making Home Affordable modification program..........the details and eligibility can be found here in this link.......


https://www.wachovia.com/foundation/...00627d6fa2RCRD

[wach-ntmare]

Thanks for the link. I will be sure to ask them about that program specifically the next time I speak with the loan counseling department. Did you have any thoughts on my hardship letter? Every day that passes, I dread not sending it, but this is a one shot deal so I want to make sure it's right.