Loan modification without hardship

One question we seem to get all the time is “do I have to show a current hardship to qualify for a loan modification?” The process of trying to obtain a loan modification is time consuming, stressful, and most of all darn right confusing. So it comes to no surprise why so many individuals have a hard time understanding the rules and procedures that come along with it.

The answer is yes! No matter how far underwater your mortgage is these lenders do not care, you must be able to prove a current financial hardship that is making it hard for you to make your monthly mortgage payments. Many people come to believe that just because there loan is much more than the current value of their home, that the bank should work with them on a principle reduction and/or rate reduction. As we all know, this is not the case!

We have also heard of many homeowners get letters from loan modification firms promising principle reductions and/or interest rate reductions. Some of these letters state that the borrower does not need to show a financial hardship, but may qualify for this assistance just because their home has dropped in value. Please folks do not be tricked by these scoundrels! So please be very wary of any solicitation letters you may receive in the mail.

In order to achieve any kind of assistance from your lender whether that be a loan modification, short sale, or deed in lieu you must be able to show that you are financially struggling to pay your mortgage. If you cannot show a hardship, the chances of the bank working with you is slim to none.

• One of the very first things you need to do before applying for a loan modification is to write out a required hardship letter.

This letter is very important and can potentially make all the difference as to whether or not you do get approved for assistance. While writing this letter you will need discuss in detail the events that have caused you to be in a situation were it is difficult for you to manage your monthly payments. Be aware that these lenders receive hundreds, if not thousands of requests a day, so make sure you do not ramble off the subject. Keep it about one to two pages at most!

Below is a list of common hardships that are considered for a loan mod:

- Adjustable rate mortgage due to increase to an unaffordable amount
-Illness
-Failed business
-Job cut
-Reduction in salary
-Divorce
-Death of spouse
-Relocation of job
-Military duties
-Medical bills

Tagged as: hardship letter, Loan modification, loan modification hardship, Mortgage Modification, reasons for hardship