Foreclosure Hardship Letter Part 2 - What Your Lender Really Wants To Hear

Foreclosure Hardship Letter Part 2 - What Your Lender Really Wants To Hear

"What should I tell my lender?" this is a question we get in our office all the time and honestly there is not a short answer. In this article I will focus on exactly what your lender wants to hear. For more information on writing a foreclosure hardship letter check out my popular FREE special report "How To Write A Killer Hardship Letter" available on my website.

What your lender wants to heat is actually pretty straight forward because your lender looks at the situation from a strictly financial perspective. When you get right down to it there are only a few things your lender really cares about.

Do You Have A Qualified Hardship?

It all boils down to "a change" which has left you with either less income or more expenses. You must prove to your lender that you have a "qualified hardship."

The truth is that there are only two qualified hardships!

#1 A sudden and unavoidable loss of income
#2 A sudden and unavoidable increase in expenses

Is Your Hardship Resolved?

One of the primary questions your lender will have is whether or not the hardship you suffered to make you fall behind in the first place is resolved. Remember, though, the bank only cares about the financial effects of the hardship - so if you have been able to replace the income lost due to the hardship, they’ll be satisfied. As long as you can demonstrate that the hardship is resolved for the foreseeable future, that is.

Do You Have Dependable Income?

If you have dependable, verifiable income, the bank will be satisfied. It doesn’t have to be from a job. But if it isn’t, they will need documented proof the income will continue for the foreseeable future.

Do You Have Enough Income?

In addition to having enough income to pay your mortgage every month, your lender is going to want to see your monthly budget to make sure you can afford all of your other bills and debt in addition to the loan payment you negotiate. As part of your hardship package, you will have to fill out a budget analysis to let them know exactly what you earn and what you spend.

What Sacrifice Are You Willing To Make?

You want to give your lender a warm and fuzzy feeling all over? Don’t be the victim. Take an active roll in making this loan modification work for everyone. Are you willing to make any sacrifices to stay in your home?

- - Are you willing to cut off your cable TV to save $69.00 every month?
- - How about canceling the cell phone to save another $69.00?
- - Could you mow your own lawn instead of hiring someone?
- - How about that gym membership you never use but are still paying for? You had better not cancel this one, you never know when the mood might strike you to get in shape.

How Much Money Are You Willing To Contribute Today?

If you have one month’s mortgage payment saved then that would be a good offer. Lenders sometimes ask for a "Good Faith Deposit" when you sign your modification agreement. This is more common when a lender is making a huge adjustment to your interest rate or rolling a large amount of back payments into the principal balance of the loan.

One loan we just completed the modification on had over $29,000 in past due payments which were all added back into the loan balance to bring the loan current, the interest rate was also slashed. The lender only wanted $2,500 as a "Good Faith Deposit" - now that’s a bargain.

Have You Filed Bankruptcy?

If you have filed bankruptcy to try and delay your foreclosure, your lender will not be legally able to negotiate with you about your loan until:

- - Your case has been dismissed by the judge*
- - The judge removes your mortgage from the protection of the automatic stay*
- - Your bankruptcy is discharged*

* Please consult your attorney

Final Considerations

Do not inflate or deflate the information in your hardship package to make it seem more appealing. Lenders have "norms" they expect to see and if your information is outside of those norms, they will investigate to find out why or simply disapprove your package. Again, try to be as objective about this as possible. If staying in your home long term is going to take every penny you have every month from now into the foreseeable future, you have to ask yourself if that’s really what’s best for your family.

Writing a hardship letter is not difficult when you know the elements which must be present and those better left out. I recommend using a worksheet like the one included in our popular FREE special report "How To Write A Killer Hardship Letter" which is available on my website. For more information on mortgage modifications, short sales and hardship letters visit our website.

Check out some of my other articles:

"Top 10 Mistakes People Make When Writing Their Hardship Letter And How YOU Can Avoid Them"

"Foreclosure Hardship Letter Part 1 - How To Write A Compelling Hardship Letter"

"Foreclosure Hardship Letter Part 2 - What Your Lender Really Wants to Hear"

"Foreclosure Hardship Letter Part 3 - What You Should NEVER Tell Your Lender"

"Get Your Automatic Mortgage Rate Reduction"

Article Source: http://articlepowerplant.com

Tom Mack simplifies the mortgage modification process. Find out more about Loan Modifications and “How To Write A Killer Hardship Letter” with his popular FREE Special Report, available at:  => CreativeLoanModification.com

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated