Can you Stop a Foreclosure with a Hardship Letter?
Do you need a hardship letter to work out a loan modification? Your personal financial hardship letter can be the key to convincing the lender that your situation caused you to fall behind on mortgage payments just temporarily, involuntarily and…in the end it was an unavoidable situation for you and your family.
Here are some examples of unexpected decreases of income:
- Job Loss
- Permanent or temporary disability
- Divorce or separation of spouse
- Death of a spouse
- Serious illness of a household income earner
- Reduction of hours or wages
- Bad year for business or a business failure
- Forced to take a lesser paying job after experiencing a lay off
- A natural disaster
- Increase in property taxes
- Job relocation
When writing your letter, make sure to include your contact information (name, address, phone or account number). Also check contact info for your credit counselor or attorney. Make sure to specify how much you can afford and describe the circumstance which caused you to fall behind in your payments. Include a detailed budget of your monthly income and expenses. Make sure to include a plan for making payments in the future.
If your situation is permanent, you could try asking your lender to negotiate lower monthly payments or agree to take a deed in lieu of foreclosure. In many cases the lender will be able to accept some type of payment rather than go through foreclosure proceedings because of high costs.
