Home Loans and Support

Hardship letter

Discussion in 'Stop Foreclosure and Tell Us Your Story' started by katieclause, Oct 2, 2012.

  1. katieclause

    katieclause LoanSafe Member

    Hi.. I am in need of writing a hardship letter for my mortgage company. I don't have much time so I'm desperate.
    My husband and I filed for bankruptcy at the end of 2007, chapter 13. We had been sending monies in to the trustee monthly. Our home was included in this this. In early March of 2011 my husband was hospitalized for emergency surgery for a hernia that included partial removal of his intestine and to place his bladder back where it was suppose to be. He spent a week and a half in the hospital and could not do normal work for one month. In the meantime his business partner decided to shut down their business, where as he kept everything.
    Once my husband was able to return to working he tried everything in his power to find more work. We have borrowed to keep up with the bankruptcy payments, we sold odds and ends to keep everything up. But in April of 2012 we were forced to final Chapter 7 and and have since been discharged. But we still have our mortgage. We are in need of writing a hardship letter but I was wondering if the bankruptcy can be used in it or not. Is there anyway I could get a sample letter?
  2. Cat Damiano

    Cat Damiano Mortgage Wars


    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


    A BK 7 should have bettered your financial status so it wouldn't be what is creating your hardship. Your husbands illness and the close of his business is what is creating the hardship according to what you are posting here, so follow the template above and when you are finished post your letter for review and we can let you know how it is.
  3. katieclause

    katieclause LoanSafe Member


    Here is a start to my hardship letter.... My husband has since gotten a job but has only been with it a month and a week..

    To whom it may concern;



    A number of changes in our lives have transpired to seriously jeopardized our continued ability to maintain our current mortgage obligations, and so we are contacting Vericrest Financial today in the hope of receiving assistance in dealing with the resulting significant negative change to our financial position. Our goal is to modify the current agreement in such a way that it allows us to fulfill our obligations. We have lived in our home for over 20 years and we want to work hard and keep it.


    Of the changes, the most significant are that, I, M*******, was hospitalized in early March of 2011 due to a strangulated intestine and misplaced bladder due to a hernia. I had to have emergency surgery to correct this problem. In early April of the same year, my business partner decided to close up our business and start another one on his own. Therefore my income from this company was over. I was not to do any lifting or driving in the month following my surgery so I was not able to find something to replace this lost income immediately. Please note that I have made a number of attempts at resolving or stabilizing my financial situation prior to applying for your assistance. In an effort to help ourselves, we have virtually drained our savings account which allowed us to pay for monthly expenses for a little while, but we tried to do too much on our own before asking for help and now have effectively reduced our savings account to nothing.
    We have asked family and friends, and although we were afforded some assistance, these resources are no longer available to us. We have liquidated some non-essential investments to help carry us through our situation and those funds have dried up.









    Clearly, we can no longer afford to continue on our current path without some assistance. It is very important to us to find a resolution to our financial situation as as quickly as possible, and so that I may continue to maintain my my relationship with Vericrest Financial. Please contact me at your earliest convenience.


    Respectfully,
  4. Cat Damiano

    Cat Damiano Mortgage Wars

    It is good, but you may want to remove the detail of the medical emergency and just put that it was a medical emergency requiring surgery. You have to keep in mind that these reps scan over hundreds of letters so keeping it short and to the point while also explaining the part about your husband starting a new job to try to get back on track is helpful.
  5. katieclause

    katieclause LoanSafe Member

    I believe I have finished my letter.. Any recommendations

    To whom it may concern;


    A number of changes in our lives have transpired to seriously jeopardize our continued ability to maintain our current mortgage obligations, and so we are contacting Vericrest Financial today in the hope of receiving assistance in dealing with the resulting significant negative change to our financial position. Our goal is to modify the current agreement in such a way that it allows us to fulfill our obligations. We have lived in our home for over 20 years and we want to work hard and keep it.


    Of the changes, the most significant are that, I, M*******, was hospitalized in early March of 2011 due to a medical emergency requiring surgery. In early April of the same year, my business partner decided to close up our business and start another one on his own. Therefore my income from this company was over. I was not to do any lifting or driving in the month following my surgery so I was not able to find something to replace this lost income immediately. In an effort to help ourselves, we have drained any savings that we had to pay for monthly expenses, but we tried to do too much on our own before asking for help and now have effectively used what we had left.
    We have asked family and friends, and although we were afforded some assistance, these resources are no longer available to us. We have liquidated some non-essential investments to help carry us through our situation and those funds have dried up.
    Please note that we have made a number of attempts at resolving or stabilizing our financial situation prior to applying for your assistance. In an effort to help ourselves, we have worked very hard to find work to start paying our mortgage payments. I am now employed with a company that has been in business for 25 years.


    Our home has been valued at $83,209.00 and we have a balance owing of approximately $100,000. My mortgage is adjustable with the interest rate set at 8.73%. My total monthly household income is $4,400 and my total monthly expenses of approximately $4,200, out of which my mortgage payments are $948.41. As of this month I am 7 months behind in my payments.


    Clearly, we can no longer afford to continue on our current path without some assistance. It is very important to us to find a resolution to our financial situation as as quickly as possible, and so that I may continue to maintain my my relationship with Vericrest Financial. Please contact me at your earliest convenience.

  6. Cat Damiano

    Cat Damiano Mortgage Wars

    Ok, this is great, the only thing that you do not need to include as the lender will already have this information on the RMA form is this;

    Our home has been valued at $83,209.00 and we have a balance owing of approximately $100,000. My mortgage is adjustable with the interest rate set at 8.73%. My total monthly household income is $4,400 and my total monthly expenses of approximately $4,200, out of which my mortgage payments are $948.41. As of this month I am 7 months behind in my payments.



    Good Luck with the modification and please do keep us posted on how it goes.
  7. Cinzia

    Cinzia LoanSafe Member

    Hi Cat, Could you please read our hardship letter and tell us what you think? Any feedback is appreciated.
    Thanks so much,
    Cinzia

    To whom it may concern:
    We are writing this letter to explain the extreme financial hardship it has been to stay current with our mortgage payments on our home of over twenty years. Currently our payments are $2104 per month which include impounds. Our current monthly gross income of $4234 makes our housing cost budget 48% of our total income on the primary note. We do carry a second mortgage on our home in which we have the additional cost for principal and interest of $261.22 monthly bringing the housing obligation we have up to over 55% of our gross income.
    I (name) am the only wage earner in the home. My biweekly paycheck can vary due to the needs of my employer. I have been putting off surgically correcting a chronic medical condition simply because we can’t afford the co-payment and the time off work. I was also moved to a different department - a lower paying position because you don‘t get the overtime. My wife Cinzia had stayed home to care for her mother who came to live with us. Since her mother’s passing, Cinzia has been looking for work but hasn’t found anything permanent. Both of our sons used to contribute to help pay household expenses but have recently moved out. One joined the military, the other to pursue a career as a firefighter.
    We have paid our mortgage payments on time but we are struggling and coming to the end of our rope. We have been forced into withdrawing from our retirement savings and selling off our assets. Last year we sold our travel trailer plus a multitude of personal items have been sold just to make ends meet. We have had our investment property (a building lot) up for sale in Idaho to pay off our second mortgage but no buyers yet. We have gone to a financial advisor - Rxxx Wxxxx of Wealth Management seeking advise and counseling. We spoke with a loan officer recently and our home has currently lost over 50% of it’s appraised value of $585,000 in 2006. A home down the street (same model as ours) recently sold for $277,000.
    We are asking you to give us a loan modification - lowering the amount owed and/or payment. This way we can keep our home and be able to make the payments to your firm, benefiting us both. We want to assure you that we are responsible homeowners and are extremely motivated to restructure our financial situation to enable us to remain in our home that we love. We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.
  8. Cat Damiano

    Cat Damiano Mortgage Wars

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

    You have covered all the bases, but you may want to exclude the first line about your income, the lender already will have this information so simply stating that you have lost income with having to change departments at work should be good. Also, letting a lender know that you are dipping into retirement accounts and paying your mortgage that way to keep the mortgage current just lets them know that even though you are struggling on the surface with a payment that is unaffordable you are still doing anything you can to make it work and by doing this, the lender actually may look at it as you can afford the payment because you continue to make it every month. In the majority of modifications that we have seen over the years, there were not very many that were granted to homeowners that were able to remain current on their mortgage.





    Who is the servicer of the loan and who is the investor? If you do not know who the investor is, try looking it up here;

    For Fannie Mae: 1-800-7FANNIE (8am to 8pm EST)
    www.FannieMae.com/loanlookup

    For Freddie Mac:
    1-800-FREDDIE (8am to 8pm EST)
    www.FreddieMac.com/mymortgage


    https://www.mers-servicerid.org/sis/index.jsp

    Please post back what you are able to find out on that and I will do my best to try to help.
  9. Cinzia

    Cinzia LoanSafe Member

    Thank you Cat for such a quick response. Our loan servicer is Bank of America and our Investor is Bank of N.Y. Mellon. (Thanks for the websites to look this up - never knew about this.) Reading different posts I saw some BofA people got Fed Ex letters (without ever asking for a loan modification) about a National Mortgage Settlement from DOJ. I looked it up on BofA's website and it looks like we would qualify for a loan modification and maybe a principal reduction - depending on who to believe. Some people here said they were current on payments and got principal reductions but then you read the BofA website and it says you have to be 60 days late. I think we will call BofA tomorrow to see what this is all about. Please give me any advice you can or what you know about this National Mortgage Settlement. I rewrote the letter taking out what you suggested and adding a couple of different things.

    OK --- We called BOA this morning to ask if the Making Home Affordable packet they sent us would include the National Mortgage Settlement. She said no, and will now email us information to fill out. She said we did qualify for the National Settlement loan modification but not the principal reduction because we weren't behind in payments. I asked if we should still return the MHA paperwork and she said yes and that BOA would decide which one was best for us. I also asked about how was that some people received a FedEx letter from BOA giving them a principal reduction and loan modification automatically without them applying for it. She said that was impossible, blah blah ... (lucky people is all I know) So then to make sure we were to still do both MHA and the National program we called BOA's MHA number. She said I could only pick one to do and not apply to both. I told her that's not what the other BOA person said. So she said,"Oh?, Ok do what she says." I'm just worried that somehow by doing both it will screw something up. What do you think? Do you think we should contact HUD to check that we filled in all the paperwork correctly?
    Here is the rewritten letter, please tell me if this one is better. Once again, we want to thank you for all the help with answering our questions. It really helps with the stress level.

    To whom it may concern:
    We are writing this letter to explain the extreme financial hardship it has been to stay current with our mortgage payments on our home of over twenty years. Our mortgage payment is 55% of our monthly gross income. My wife and I have very good credit and work hard to keep it this way.
    I (name) am the only wage earner in the home. My biweekly paycheck can vary due to the needs of my employer. I have been putting off surgically correcting a chronic medical condition simply because we can’t afford the co-payment and the time off work. I was also moved to a different department - a lower paying position because you don‘t get the overtime. My wife Cinzia had stayed home to care for her mother who came to live with us. Since her mother’s passing, Cinzia has been looking for work but hasn’t found anything permanent. Both of our sons used to contribute to help pay household expenses but have recently moved out. One joined the military, the other to pursue a career as a firefighter.
    We have been forced into selling off our assets. Last year we sold our travel trailer plus a multitude of personal items have been sold just to make ends meet. We have had our investment property (a building lot) up for sale in Idaho to pay off our second mortgage but no buyers yet. We have gone to a financial advisor - Rxxxx Wxxxxxx of Wealth Management seeking advise and counseling. We spoke with a loan officer recently our home is under has currently lost over 50% of it’s appraised value of $585,000 in 2006. A home down the street (same model as ours) recently sold for $277,000. A second home on our block (again the same model) is a Short Sale and they are asking only $199,950 ($6,998 Down) and their Loan Balance is $535,750.
    We have finally come to the end of our rope and find we are in imminent danger of not being able to pay our mortgage. We are asking that we be apart of the National Mortgage Settlement. We have read that this modification program includes significant principal reduction and an affordable monthly payment. This way we can keep our home and be able to make the payments to your firm, benefiting us both. We want to assure you that we are responsible homeowners and are extremely motivated to restructure our financial situation to enable us to remain in our home that we love. We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on.
  10. Cat Damiano

    Cat Damiano Mortgage Wars

    Hi Cinzia,


    Ok, that letter is better and gets the point across as we have to keep in mind that these reps really just glance over them and you want the pertinent information in regards to the hardship to be in the first few lines.

    As far as the programs go, if you meet the initial criteria for the DOJ Settlement program you would be better off working on that avenue if having to choose one for now. We have seen some very good modification approvals with that program for those whos loans meet the eligibility. If that doesn't work out, then they can look into the other options from there.

    Good Luck and please keep us posted on your progress.
  11. Cinzia

    Cinzia LoanSafe Member

    Great information! Thanks so much and I'll keep you posted.
    Cinzia
  12. sandidawg

    sandidawg LoanSafe Member

    Hello, I would like to get your input on my version of a hardship letter that I am submitting to NACA and my loan servicer.

    To whom it may concern:
    I am writing this letter to explain the financial hardship it has been to stay current with my mortgage payments on my home of nearly 8 years. My mortgage payment is 47% of my monthly gross income. My most recent payment had been returned due to insufficient funds. I have contacted your customer service department and I am currently on a repayment plan to make up for the returned check and to continue with the upcoming payments. Last year, I had a insufficient funds for my payment and I took a loan from my 401K which is now being paid through a payroll deduction, which is also adding to my strained budget. My greatest fear is that this will continue to occur more often in the near future. I have very worked hard to keep up with the payments, sometimes allowing my bank account to occur overdraft fees. Sometimes these fees go into the hundreds, I had to do this to make ends meet and fulfill all of my obligations.

    I used to be able to earn additional income with overtime but that option has been taken away due to the needs of the business. The nature of my work, on call and odd hours, will not allow me to obtain a second job. I have been struggling for most of the time that I have had this mortgage due to a breakup of the relationship with the person who purchased the home with me leaving me to be the sole owner of the property. Also I experienced another financial hit when the main sewer line had to be repaired costing about $8000. Which added to the already stretched out budget that I have. However, I have managed keep up with this payment.

    Therefore, I have started taking steps to ensure this will not continue to happen. I have recently started a debt management program with <organization>. I plan to be able to manage my debt so that I do not have more issues with my mortgage payments. </organization>

    I want to assure you that I am a responsible homeowner and I am extremely motivated to restructure my financial situation to enable me to remain in my home. I am fully committed to fulfilling all of my obligations with my mortgage being my priority. I would like to request that I could be apart of the National Mortgage Settlement. I have read that this modification program includes significant principal reduction and an affordable monthly payment. This way I can keep this home and be able to make the payments to your firm, benefiting us both. I hope that you will consider working with me.
    Last edited: Nov 14, 2012
  13. Cat Damiano

    Cat Damiano Mortgage Wars

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

    The letter is good, but you would not need to put in the payment calculations as they would already know this information and also you do not want to let them know that you have borrowed from a 401 k to make payments. Your retirement accounts are safe from a lender pursuing if anything should happen. Not being able to afford to pay your payments is your hardship, but doing anything in your power to remain current doesn't really show this hardship. In order to get help, unfortunately, most lenders will not look into the modification option until you are in default.

    For that reason, if it were me, I wouldn't include that into the hardship letter but rather focus on what you are experiencing that will cause you to default.
  14. Cinzia

    Cinzia LoanSafe Member

    BoA Loan Modification Paper Work Frustrations

    Just updating our status with our BoA Loan Modification and it has been frustrating just getting the paperwork in. Main problem is why don't they put on the checklist what they want sent in the first time instead of dragging it all out. On the packet's checklist they ask for the Dodd-Frank Certification Form to be filled out. They don't give you this form, so I looked it up online and printed it out. Fine. We complete every form and give all the documents they ask for and mailed it all out. A week goes by and we get a call that "everything arrived but your missing some pages and some are cut off." Cut off? Everything was sent in mind you - it's what they do with your papers when they receive them. Plus they let you know "they actually want two years back Fed. Tax returns not just one." Why not just ask for it the first time? And they want you to "Fax everything to them not mailed in." Told them we don't have a Fax machine,... "well, it has to be Faxed"... so after taking all the papers to be Faxed - costing $75 (because of the long tax return) - we get a Fed-Ex letter and it's an enclosed envelope saying to mail in the paperwork. REALLY? PLUS write your loan number on the bottom of every single page. NOW THEY TELL US? Why not state that in the original packet checklist? So we called our CR and told her about how much it cost us to fax all the pages and then getting the Fed Ex letter saying to mail it in with the loan number on every page. She "didn't know about any letter -- but we could have gone to any BoA and gotten all the faxing done for FREE." Why didn't she tell us that before??? "Sorry, you didn't know that?" How the hell was I supposed to know that? It's not written anywhere. She didn't tell us before. So, then she informs us she needs some of our pages -(from the first sent in paperwork that she already reviewed )- "resent again because they look too light, it might be when they were making copies." At least this time I know that we are to write our loan number on the bottom of each page, so when they misplace a page they can find where it belongs -- and we can go to a BoA and do the faxing for free.
    Thanks for letting me vent.
  15. Cat Damiano

    Cat Damiano Mortgage Wars

    You can vent here anytime! I am so sorry that the process is so scattered. I do hope that you are able to get something worked out soon.l Please keep us posted.
  16. Annie Mac

    Annie Mac LoanSafe Member

    I am about ready to send in my eleventh full application, after ten previous, fifty extra docs, eight hardship letters extra outside of applications over the last five years. It is now my opinion they do not read these letters at all. So, my only suggestion is keep it very simple, write to about a third grade reading level. Anything else they will not take the time to read or cannot understand. I will spare you some of the conversations I have had explaining the most basic concepts of wages, taxes, to Chase employees...but KEEP IT SIMPLE!
  17. Cinzia

    Cinzia LoanSafe Member

    Well, maybe here's a first... they asked us for a more detailed Hardship Letter! After doing that, we were then sent a letter denying our loan modification. They said since we were current on our payments and basically had not gone through all our savings they were confident that we could continue to make the payments. I guess we will call HUD and call them back to appeal this. I really don't understand how some people get it and others denied. I feel we would have more of a chance if we stopped paying. Good Luck to everyone in the coming new year!
  18. Cinzia

    Cinzia LoanSafe Member

    Hello Cat, Well it looks like we will be in defaulting on our loan payments in the coming month like we told them when we tried to get a loan modification. We were denied the
    loan modification in Dec. 2012 because they said we had too much in our savings. Well we have spent our nest egg to make repairs on the house, hospital bills, and pay the mortgage. My question is should we try again to modify our loan again? Is the principal reduction the DOJ was doing over with now? Thank you for your help.
  19. Cat Damiano

    Cat Damiano Mortgage Wars

    If the savings are no longer there, you should try again as your circumstances have changed since being denied. As far as I am aware if you were eligible for the DOJ modification, it should still be available.

    Modification, Refinance, and Short Sale Program Enhancements | Bank of America
  20. Nhauter

    Nhauter LoanSafe Member

    I have a quick question: I am looking to sell my house because our family has rapidly outgrown it. We purchased it 5 years ago when we thought the market was at it's lowest point. However, we have lost almost $40,000 value on the house. We have stayed an extra two years longer than we normally would have. The way it stands now, we can't sell or rent our house without losing serious money. Which is something we just cannot afford. Is there anything that my mortgage company can do? I know hardship letters are usually written to keep houses from going into foreclosure but I didn't know if there was some other aspect that I was missing. Thank your for your help!

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