A hardship letter is a written statement explaining why the mortgage is in default and is required by all mortgage companies in order to qualify for any type of loss mitigation, which might include a short sale i.e. a situation in which you owe more than the fair market value of your home.
If you do not have a valid hardship, you will not be considered for a plan to stop foreclosure. A hardships letter is your chance to explain in detail what hardship you have in your life to make you fall behind in payments. Another term that a mortgage company might use that refers to a hardship is a reason for default.
The hardship letter needs to be actual details and supporting documentation will always help to prove your hardship.
If you are planning on saving your home form foreclosure, you can explain that your the hardship was temporary and you are now in a position or will be in a position to begin making timely payments. In some instances, a claim that you are over extended will be a legitimate hardship which can be verified through your credit report and other financial data.
Important questions to you in how to write a good hardship letter:
- When did the loan become delinquent?
- How have payments been managed from the point of hardship to the point of becoming delinquent?
Important information needed to write a Hardship Letter
• Loan number
• Reason for default
• Hardship supporting documentation, events detailed, dates of events
• Your proposed outcome-what you would like to happen
• Documents supporting end of hardship
Valid Reasons for Accepted Hardship
• Death of borrower
• Death of spouse or family member
• Decrease in working hours
• Elimination of overtime or second job
• Involuntary job relocation
• Increase of expenses due to short term unemployment
• Mandatory pay reduction
• Decline in earnings for self employment
• Failure of business
• Short term or permanent disability
• Increase in expenses due to illness
• Divorce or Incarceration
For More Information on how to prevent foreclosure and for information on a discrete short sale, please contact Angie Perez via her cell (973-715-6210) or email angie @ njretoday . com (No Spaces).
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