How do I write a loan modification letter?

Here are some tips for writing an effective letter and an easy-to-follow template to guide you.

Keep your letter to a single page.
Include income and asset documentation such as pay stubs, bank statements, and other relevant paperwork.
Stick to the facts.
Let the lender know the specific concession you are requesting.

How do I write a hardship letter for a loan modification?

Make a specific request: Start by stating the purpose of your letter (whether it’s a loan modification or a short sale), so your lender knows what you want. It should say something like “I need to restructure my mortgage and obtain a lower, fixed interest rate…,” in a way that compels them to find out why.

What is a hardship letter for loan modification?

If you are looking to request a loan modification, your lender will most likely ask you to write a hardship letter. The purpose of the letter is to describe why the borrower may not be able to make their mortgage, car loan, or other debt payments.

Can I do my own loan modification?

While you can apply for a loan modification yourself dealing directly with your bank or lender, you can also use a HUD-approved housing counselor or an independent, third-party loan modification company to help you with this process. A loan modification company charges a fee for its services.

What do you write in a hardship letter?

How to Write a Hardship Letter – The Ultimate Guide

Hardship Examples. There are a variety of situations that may qualify as a hardship.
Keep it original.
Be honest.
Keep it concise.
Don’t cast blame or shirk responsibility.
Don’t use jargon or fancy words.
Keep your objectives in mind.
Provide the creditor an action plan.

What should I write in a hardship letter?

What is proof of financial hardship?

Proving an economic hardship often requires a lot of paperwork as evidence. Evidence often submitted with an application include things like: proof of income (pay stubs, offer letter, etc.) proof of other income (e.g., alimony, child support, disability benefits) an expense sheet laying out all your expenses.

What are examples of hardships?

The most common examples of hardship include:

Illness or injury.
Change of employment status.
Loss of income.
Natural disasters.
Divorce.
Death.
Military deployment.

Who qualifies for a loan modification?

Qualifying for a Loan Modification

You have to be suffering a financial hardship.
You have to show you cannot afford your current mortgage payments.
You have to be able to show that you can stay current on a modified payment schedule.
The property has to be your primary residence to qualify for a HAMP modification.

What documents are needed for a loan modification?

Documents You’ll Need to Provide With Your Application

an income and expenses financial worksheet.
tax returns (often, two years’ worth)
recent pay stubs or a profit and loss statement.
proof of any other income (including alimony, child support, Social Security, disability, etc.)
recent bank statements, and.

How can I prove hardship?

Letters from medical professionals as evidence of physical and/or emotional conditions that will lead to extreme hardship. Copies of tax returns and/or pay statements as evidence of income. Copies of statements showing any debts that need to be settled in the United States.

What is the purpose of the loan modification hardship letter?

A loan modification hardship letter is a formal way to request a modification to a loan . This letter is the place where the borrower can express his or her financial troubles in personal terms to have the best chance to stop a foreclosure or receive better terms on an outstanding loan.

What is a loan modification?

Loan Modifications. A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment.

How do you write a hardship letter?

Tips for Writing a Hardship Letter 1. Keep it original 2. Be honest 3. Keep it concise 4. Don’t cast blame or shirk responsibility 5. Don’t use jargon or fancy words 6. Keep your objectives in mind 7. Provide the creditor an action plan 8. Talk to a Financial Couch

What is a mortgage modification agreement?

A mortgage modification is an agreement between you and your lender to avoid a foreclosure by making the terms of your loan more affordable. There are several different methods of modifying a mortgage, including reducing the interest rate, reducing the principal balance, and extending the amount of time left for repayment.