Hardship Loan Modification

The purpose of a hardship loan modification is to eventually help distressed homeowners avoid foreclosure. Recently a lot of mortgage lenders started to be more willing to work with homeowners that want to remain in their homes. We all know, when foreclosure proceedings take place, nobody wins. The mortgage lenders lose a great deal of money when a property is repossessed and will try to make arrangements that are suitable for their institution as well as the homeowner.

A home loan modification request based on a hardship can usually be made by the title holder / homeowner, if there exists a valid hardship; this is the main qualification. Find typical hardship reason here (this is our section about the content of hardship letters).Most mortgage lenders consider a hardship to be valid if the homeowner has been laid off, hospitalized, divorced or unable to work. Many times they will even consider a loan modification if the interest rate has adjusted, making the monthly payments excessively high. The first step in the process is to write a hardship letter which will explain the circumstances surrounding the hardship.

When making a modification request the homeowner needs to clearly convey the circumstances that are causing the hardship. The letter should be kept short and to the point, without laying blame on the lender. Lenders are currently overloaded with modifications so the hardship letter should clearly state the facts in a concise manner and should not resemble a short story.

Lenders usually ask you to provide details about your finances. Create a financial worksheet to accompany your hardship loan modification letter. They usually want proof of income such as current (the last two) pay stubs, tax returns and bank statements. Each mortgage lender will have their own requirements and they will likely vary from lender to lender. So make sure to check with the loan modification department of your lender first.

Many homeowners will enlist the help of an attorney or a loss mitigation specialist to help with the preparation of the modification request. These professionals often have a better idea of what the mortgage lender is looking for and can advise you accordingly. An experienced foreclosure attorney or loss mitigation specialist will be able to put the request package together in such a way that the lender will give the hardship loan modification request serious consideration. Another way to approach the lender is by doing it yourself, without an attorney.

If a homeowner is going through a valid hardship they should take the necessary steps to negotiate a hardship loan modification. The sooner a homeowner starts the process, the sooner they can put the stress of possible foreclosure behind them. If help is needed to prepare the hardship request, there are qualified professionals that are ready to help.

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