Sample Foreclosure Hardship Letter for Borrowers to Mortgage Lenders
A foreclosure hardship letter allows borrowers to explain circumstances that caused them to become delinquent on their mortgage note. Many people struggle with what to write to their lender and are intimidated by the process. In order to obtain positive results borrowers need to understand what information to include and how to present it.
A well-written foreclosure hardship letter will receive higher recognition than a poorly written document. Mortgage experts suggest a handwritten letter is more effective than a typed hardship letter. If your handwriting is difficult to read, have someone else write your explanation for you or type it out if necessary. Considering letters of hardship are the most important financial document you will ever write, take every precaution to ensure it can be easily read and understood.
Foreclosure hardship letters are used when borrowers want to obtain a loan modification to avoid foreclosure or receive short sale approval. Short sales are typically offered only after all other methods to save the home from foreclosure have been exhausted.
All transactions which involve altering terms of mortgage loans are handled through the lender’s loss mitigation division. Loss mitigators work with borrowers facing financial challenges every day. They have heard every sob story, excuse and outright lies, so it is best to be upfront and honest from the beginning.
When possible, take time to develop a good working relationship with your assigned loss mitigator. Start by asking questions of what can be expected, duration of the process, and eventual outcome.
Loss mitigators work as mediators between lenders and borrowers. They do not make final decisions regarding mortgage loans, but can be instrumental in helping you achieve your goals. If you have legitimate reasons for not being able to remain current on mortgage payments, lenders are usually willing to work with you.
The following sample foreclosure hardship letter offers a basic outline of information which should be included. You will need to make adjustments and fill in the blanks based on your personal circumstances.
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Sam Jones
123 Any Avenue
Anytown, State 12345
John Smith
USA Mortgage Lender
123 Any Street
Anytown, State 12345
Current Date
RE: Your Loan Number (include either loan modification or short sale)
Dear Mr. Smith,
I am contacting you to request a loan modification (or short sale) for my home located at 123 Any Avenue in Anytown, State. I appreciate you allowing me to explain the circumstances that caused me to fall behind with mortgage payments. Although I have done everything possible to reduce monthly expenses, I am still unable to pay my mortgage payment in full each month.
I became delinquent with my mortgage because (explain reason here). Currently, I do not earn enough income to cover the entire amount and am concerned about falling further behind. I have every desire to pay the past due amount, but based on my current income I do not know how to accomplish this. I am turning to you for assistance.
This letter is a request for consideration to temporarily reduce or suspend my mortgage payments through a loan modification. This would allow me to time to get back on track financially and become current on monthly payments.
My home is very important to me and I do not want the property to fall into foreclosure. Please advise me of available options that can allow me to keep my home. I am eager to reach an agreement and appreciate your prompt response.
Sincerely,
Print name of Borrower(s)
Signature of Borrower(s)
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Send the foreclosure hardship letter via the United States Postal Service as certified mail with return receipt request. When the lender receives the letter, an employee must sign the receipt which is then returned to you. Attach the signed receipt to a copy of the original letter of hardship. This provides proof the letter was received by the mortgage lender.
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