First Franklin Hardship letter

[savisa]

Hello,

I'm not sure if this is the right place to post but here I go...

Back in Oct. 2008 applied for modification, was current. I was worried about arm adjusting. In March got a decline, arm did NOT adjust. They denied based on no income loss, but my EXPENSES are increasing. I bought the house in March 2007 with the promise to refinance after 12 months since there was a 3% prepayment (predatory?) in the first 12 months. Still a 1% penalty for 2 years!

13 months into the loan I find out that I don't have enough equity to refinance. I can't afford all of my bills, living on credit, but maxed out there too. This months payment will be my first default as of tomorrow if I don't pay it, which I cannot.

I need a loan modification in order to afford the payment. I called Hope for homeowners and am reapplying for a modification. I need advice on the letter I am writing. So far this is what I have. It is already a page. Anything I could delete? Or add Please help! Thanks.

Lender is First Franklin, HLS is servicer. Rate is 8.2% on 137,700. Income is 33930 yearly, Net monthly 2800. Payment is 1196.00. Escrowed.

Here is my rough draft:


To Whom It May Concern:
I am writing this letter to explain why I am in default on my mortgage. I have done everything possible including selling off anything of value in order to make ends meets. I took this loan on the promise we would be able to refinance. We had a prepayment penalty of 3% within the first 12 months, in the 13th month we contacted our broker and other brokers to find out we could not refinance due to the economic conditions of the real estate market; I didn’t have enough equity even though I put down 10% of the purchase price at closing. My number 1 goal is to keep my home, but I need a loan modification to help me achieve that goal.
When I purchased my home I had only two other trade lines of credit. Unfortunately, I have had to open other credit cards that were necessary to buy groceries, pay for auto fuel, and even a care credit which is a health credit card. My insurance doesn’t cover dental and vision, so the care credit was a necessity. I recently had to hire a lawyer and pay for legal expenses which added to the financial hardship. My monthly expenses have increased beyond my means. I have been responsible with my credit, paying the bills on time and through no fault of my own I cannot refinance to take advantage of the historically low interest rates. I have exhausted my resources and can no longer afford the current monthly payment at its current rate.
I feel that a loan modification would benefit us both. I would be able to resume making monthly payments to you at a price that I can afford. I request that you reduce our interest rate. According to the US Treasury, “Making Home Affordable” plan, we would qualify for a modification.
Who the Program Reaches:
Focusing on Homeowners At Risk: Homeowners at risk, such as those suffering serious hardships, decreases in income, increases in expenses, payment “shock,” high combined mortgage debt compared to income, who are “underwater” (with a combined mortgage balance higher than the current market value of the house), or who show other indications of being at risk of default may be eligible for a loan modification.

[Moe Bedard]

Hi savisa,


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


Is this the only loan on the property that is included in the $1196 payment?

Also when setting up the hardship letter try to keep it short and to the point and follow a format that will le the lender know what steps have been taken to be able to pay the mortgage moving forward................


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.

[savisa]

Yes, the only property is the primary residence in the 1196. I also had to borrow 15300 from family for downpayment, which I pay a loan payment monthly of 239.

I have a contract with them that states in the 13th month I was to refinance and pay them back, but couldn't do that.

In my hardship letter, I did explain the circumstances! I could only afford this loan with the refinance of a better rate. I haven't yet lost income, although we are "low income" to begin with.

I found a statement in my mortgage papers that First Franklin generally only makes loans with income 4 times the monthly loan amount. I thought that was interesting.

At what point do I send a QWR? Now or later? I would love to have someone look at my loan and see if it is in fact predatory lending. I believe it is!

ANyway. Thanks for your advice!

[Moe Bedard]

What I meant was the 31% target that they lenders are trying to get to of the gross income would only include the mortgage payment on a first lien with the prinicpal, interest, taxes and insurance on it by itself..........it doesn't inlcude any other lien payments.

You can do a QWR at anytime........you will need to send it to the customer service address from your statement...........
here are the examples........
Examples of a Hardship Letter