What Qualifies as a Hardship for Purposes of a Mortgage Modification?
If you're applying for a mortgage modification, your lender will probably request a hardship letter explaining why you've fallen behind on your mortgage and deserve to receive a loan modification. Your mortgage modification attorney can help you craft such a letter, but you may want to give it some thought before meeting with a lawyer.
Events That Cause a Financial Hardship
A financial hardship is an event that negatively affects your monthly income or expenses. Examples of such events would include:
- An illness or disease diagnosis that has forced you to miss work, cut your work schedule or caused you to lose your job
- Unemployment or an involuntary reduction in your work schedule
- A failed business
- The death of the person who co-signed the loan and/or contributed to the loan payments
- Military deployment
- A natural disaster that damaged the property
- Other circumstances beyond your control
Tips for Writing a Financial Hardship Letter
When writing your letter, keep the following in mind:
- Keep your letter short-ideally one page and no more than two pages.
- Avoid run-on sentences and long paragraphs. The person who reads it will probably just skim it.
- Include your name, address and loan number in the letter's header section.
- Lead with the key reason for your financial hardship.
- Delete unnecessary details.
- Be polite.
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