Acceptable and Un-Acceptable Hardships for Loan Modifications
Bankers actually have a heart!
When it comes to loan modification and short sales, a reasonable hardship is hugely important. Bankers need to know that the person requesting a loan modification or a short sale has a good reason for it, and deserves the opportunity. This hardship is explained through a hardship letter and / or a hardship affidavit.
These are the keys for an effective hardship letter:
- Tell the truth
- Include all the reasons why right now it is not possible to keep up with the payment. Some reasons may have an origin dating even years ago.
- Always demonstrate all the effort that is being made to continue paying.
- Mention how important it is for you, as a homeowner, to fulfill your obligation to the bank.
- Clearly request help from the creditor so the situation can be corrected.
- Never mention that there higher priorities than paying the bank.
- Demonstrate that you are a very reasonable and responsible person worth getting a loan modification for.
Acceptable Hardships:
- ARM’S – Adjustable rate mortgages already, or about to become un-affordable.
- Illness of borrower of family member
- Decrease but not loss of income
- Job loss of one of the borrowers. The other one still brings income. Unemployment is not considered an income source
- Important needed property repairs
- Inability to sell or rent property
- Mortgage servicing issues
- Failed business situation as long as there is still income
- Death of borrower, spouse, or close family member
- Divorce
- Marital separation
- Natural disaster causing damage to property
Un-Acceptable Hardships
- Property has lost value but all else is fine
- Borrower needs money to pay for children’s education
- Borrower needs money to pay for other debt (credit card, car loan, etc)
- Rental property is not cash flowing enough
- Borrower’s bad attitude towards the bank reflected in hardship letter
We offer mortgage loan modification services. Call us today for help with your home loan modification 866-724-4292
