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- A mortgage hardship letter is an opportunity for a homeowner to explain the situation that led them to fall behind in paymentsNewsday.com: The Federal Plan to Help You Avoid Foreclosure (March 13, 2009)
- Goal of a mortgage hardship letter is to convince the lender to work out a plan to avoid foreclosureCalculated Risk: How Not to Write a Hardship Letter (May 22, 2008)
- Hardship letters are often required by a lender in addition to other documents related to assets, liabilities and incomeNewsweek: Create Your Own Bail Plan
- Is a part of the loan work out or loan modification process
- Explaining the situation can help avoid foreclosure
- Among the hardships considered include the loss of a job, death of a spouse or co-borrower, divorce, military duty, reduced income, medical bills, illness
- A two or three paragraph letter is recommended when writing a mortgage hardship letterNewsday.com: The Federal Plan to Help You Avoid Foreclosure (March 13, 2009)
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A mortgage hardship letter is a written explanation to a mortgage lender, outlining the circumstances that led a homeowner to fall behind in their mortgage payments. Mortgage lenders require such letters during the loan modification process or for a "work out." The letter is used by lenders to determine if a homeowner would be able to keep current with their payments under a new plan.Newsday.com: The Federal Plan to Help You Avoid Foreclosure (March 13, 2009)
Mortgage servicers and lenders also require monthly income statements, tax returns and information related to debts in addition to hardship letters.Newsday.com: The Federal Plan to Help You Avoid Foreclosure (March 13, 2009)
Appealing to a Lender
A mortgage hardship letter is an opportunity to explain your situation to a lender. The letter will be used to determine if you can follow through on a new arrangement. Although lenders will take legitimate reasons into consideration, they want to know that the situation was temporary and that you will be able to keep up with payments under a new plan. It is advisable to give a brief account of the circumstances followed by a practical offer of what you can afford to pay in order to stay current on your mortgage.AFS: How to Write a Hardship Letter Calculated Risk: How Not to Write a Hardship Letter (May 22, 2008)-
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Mortgage Hardship Letters Questions
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