Financial Hardship Letter: Tips On Persuading Your Lender To Consider You For HAMP

Loan modification is highly sought-after by many homeowners as it offers attractive terms to include lower interest and lower payments. However, not all homeowners qualify for loan modification under HAMP, but only those in severe financial hardship. In addition, lenders are not required to offer loan modification, and in order to convince them to soften up the loan terms you need to be very persuasive. The best way to persuade your loan servicer and get loan modification is to write a convincing letter of hardship. There are certain things that your letter should contain, as well as the ones it should not.Things To IncludeIn order for your letter to be most effective, it should be written according to the following guidelines:Make sure you specifically list your request for loan modification consideration under HAMP. In order not to waste your time, make sure you meet the basic criteria of Home Affordable Modification Program first. If you do not, a lender is not obligated to review your request.Keep your letter straight to the point. Think of your letter of hardship as of your resume – it should be short, well supported with facts, and no space for emotions and irrelevant details of your life. Like employers, banks look through hundreds of hardship letters every day, and if your letter is too long or misses relevant information, it would end up in a trash bin without being read.Include valid reasons of why you think you are eligible for loan modification. List your hardship reasons, whatever they may be: a job loss, a pay cut, increased credit card payments, unforeseen expenses, and so forth.Briefly explain why your home is so important to you. You are in a lot of luck if you have kids or ill relatives to take care of – make sure you mention how your neighborhood school is important to your family or how much hassle you would have to go through while moving to a leased apartment with your sick relative.Things To AvoidThere are certain things you should not include in your hardship letter, as they would greatly reduce your chances of being considered for HAMP. Never write any of the following:Do not blames anybody for ending up in a situation you are in. Many people try blaming the bank employees or mortgage brokers. You should mention unforeseen circumstances and show that you have done everything you could to prevent foreclosure.Do not make any threats. Banks have good lawyers and hate people threatening to sue them. Any mentioning of a lawsuit would cause a negative reaction that you do not need.Never mention that you can afford the payment, but just want to avail from lower interest rate HAMP features.Do not lie. In case you would be considered for HAMP, the bank would find out the truth anyway, so what is the point?A letter of hardship is the first important step on your way to loan modification. Make sure you understand how vital it is for your well-being. Always make sure you use short power verbs and sentences that are persuasive. Proofread and change your letter of hardship as many times as you see necessary.