In order to qualify, you must have a specific hardship reason, and one the bank is willing to accept. It is not enough to say that you cannot pay your mortgage. Your lender knows that. It is also not enough to say that you have fallen on hard times or that unexpected events have happened. It also does not matter that you think it is unfair that you ended up with a payment you cannot afford. The fact is that you are asking your lender, whom you owe money, to change the terms of your paying it back. In order to for the lender to even consider doing what you are asking, you need to have a specific reason why you were unable to make your mortgage payments. Specific reasons include: loss of job or reduction in income, death of spouse or co-borrower, divorce, illness or medical bills, and, in some cases, an adjustable rate mortgage reset.
STEPS TAKEN TO ADDRESS HARDSHIP
It is not enough to tell your lender that you have hardship. You need to state specifically what you have done in response to the hardship. This shows the lender that you are serious and that you are prepared to fix the situation. For example, if you lost your job, you need to tell the lender what you have done to obtain new employment. You should also provide specific information regarding attempts to refinance your home.
YOUR PLAN OF ACTION
Your lender needs to know when it will be paid. It is not enough to tell your lender that you will pay what you owe. You need to tell your lender what you plan to do to bring your payment current. You will need a specific payment plan and show your lender that you are able to pay it. Your letter needs to tell your lender and prove to your lender that, if your monthly mortgage payment is reduced to a certain amount, that you will be able to pay that amount.
The burden of proof
Last, and definitely not least, you need to back up the plan you have offered your lender. In order to do that, you need to submit documents proving what you say in your letter about what you earn, what bills you pay every month and what funds you have available to make payment. If you are not sure what documents your lender will need, at the end of the letter, offer to provide all documents the servicer requests and ask the servicer to tell you what documents to provide.
When writing your letter, keep in mind that you are writing to a person who is receiving it is also receiving a large volume of letters from other people in your situation. Keep the letter short, polite and to the point. The loan modification process is an attempt to keep your home. The hardship letter is an extremely important step in that process.