One of the most crushing debts that Americans face is their mortgage. When homeowners fall behind on their mortgage, it’s often difficult to reestablish financial stability. If the situation continues to destabilize, homeowners exploit all their options to avoid a foreclosure and other consequences. The most popular option is to seek a mortgage modification. This allows homeowners to reschedule their repayment terms, making it easier to repay debt.
Tips for Writing a Hardship Letter
The hardship letter that you send to your creditor will be the first and most powerful impression that you make for your case. However, avoid filling the hardship letter with long emotional descriptions designed to elicit their sympathy. You won’t receive any from the institution, and this is the number one mistake that people make when writing a hardship letter.
Instead, focus on why a mortgage modification is necessary in the context of your financial situation and why it benefits both parties. Elements to include are:
· Why you stopped making your payments. Whether it was a job loss, illness, emergency, or some other situation, be sure to succinctly explain why you were unable to pay the mortgage. Also remember to highlight that this was a temporary struggle and that you should be able to repay the debt in the future. This will set the stage nicely for your mortgage modification request. Regardless of how personal the situation behind your delayed payments might be, keep it factual and dry, not emotional.
· Offer a solution. If the hardship is temporary, give an estimate as to when you can continue making payments. If you want to keep your home, be sure to say so and feel free to make specific requests such as a reduction in interest rates. Be sure to reiterate the point that your hardship is temporary and that you have good intention to fulfill your loan and avoid defaults in the future.
· Include contact information. Surprisingly, many people who write hardship letters forget to include basic contact information in their request for a mortgage modification. Including a return address on the envelope isn’t enough, as it can easily be thrown away. Instead, write any important information on the letter itself.