The 3 Most Important Steps When Writing A Loan Modification Hardship Letter

Don't feel like you're at the end of dead-end street if you're struggling to make your monthly mortgage payments. Depending on the life circumstances that have led up to your financial difficulties, your lender may qualify you for a loan modification. Banks know that helping your modify your mortgage is better than foreclosure, so they will attempt to assist you. One of the requirements for consideration of a loan modification is for you to write a hardship letter.

By using the three steps below, you will be certain to include the most important elements in your letter.

1) Indicate the cause(s) of your financial difficulties. Were you downsized of laid off from work? Were you involved in an accident? Has a divorce caused your financial difficulty? Has there been an illness that racked up extensive medical bills? Your hardship letter should detail your circumstances to show them that prior to extenuating circumstances you were meeting your debt obligations.

2) Explain how the circumstances outlined in number one above are going to impact your ability to meet your monthly mortgage payments. If you haven't yet begun to fall delinquent on your loan, explain to your lender how you foresee it in the near future based on the financial hardships you are facing. It's better to be proactive to request a loan modification before your payments fall past due. If your payments are already in arrears, point out that the delinquency didn't begin until your circumstances changed.

3) Demonstrate to your mortgage lender your plan to continue to be a responsible homeowner and what actions you are going to take to get your spending and finances under control. If you are going to sell some items, tell them that. If you are going to work under a budget, share that with them. The bank will be more likely to approve you if they are feel that you are partnering with them and are willing to make sacrifices to see you through this difficult time.

Be brief, concise, and accurate. The loan modification hardship letter is the only document that puts a face and personality on your situation and is the most convincing document that you will provide to your lender.