When a person applies for a short sale, deed in lieu or loan modification, they will likely be required to submit a hardship letter, which is part of loss mitigation, and it must be submitted along with tax returns, pay stubs, financial statements and other information. With the hardship letter, the lender will gain a better understanding of the borrower’s finances and the circumstances that led to their difficulties.
Hardship During the Foreclosure Process
Hardships are circumstances under which a person cannot make their mortgage payments. The following situations typically meet the criteria for loss mitigation programs:
Pay cuts and job loss
Serious illness of a family member or homeowner
Medical bills
Separation or divorce
Interest rate adjustment
Military service
Natural disasters
Writing the Hardship Letter
Many borrowers don’t spend much time writing the hardship letter, or they mistakenly copy one off of the Internet. The representative reviewing a person’s file has likely read dozens of these letters, and genuine appeals have the greatest chance of success. These letters are meant to explain the borrower’s situation to the lender, and it details how they can help the borrower avoid foreclosure in Glendale, AZ.
Considerations on Loan Modifications
The significance of a hardship letter differs depending on the loss mitigation type the homeowner is requesting. With short sales, lenders look at whether the amount they’ll get is more or less than what they’d get with a foreclosure. A person’s likelihood of getting a deed in lieu depends on whether the property has other liens. A simple letter is acceptable in these situations, but those needing loan modification through Asheton B. Call will need to go into more detail.
When a homeowner writes a hardship letter requesting a loan modification, they should consider the lender’s primary goal: to keep receiving payments. Lenders want to know whether modification will ensure that the borrower can make timely payments in the future. When seeking to avoid foreclosure in Glendale, AZ, the borrower should Browse Site and demonstrate that they have eliminated unnecessary spending. Lenders want to see that a borrower is willing to make sacrifices, and the letter is a good place to demonstrate that.
