How,Write,Hardship,Letter,That business, insurance How to Write a Hardship Letter That Gets the Bank to Say \\
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1. The Reasons for the HardshipBe CLEAR about what your hardship reasons are! It could be a number of things, including (but certainly not limited to)Loss of a jobIllnessARM adjustmentProperty tax hikeDivorceIn any case, you first need to compileand assess what the most compelling reasons for hardship are. Putyourself in the bank's position as a lender. If there is a way you canmake the mortgage payment,they are not going to allow a short on theloan. So be very clear what circumstances have are making it impossibleto keep up with the mortgage payment.2. Be Specific about your HardshipOnce you have established your reasons for hardship, you need toput in the effort to understand how that hardship has impacted youspecifically. For example;Job loss, and family income has dropped by $2400 per monthMedical Bills due to "X", which total over $50,000A divorce which puts child support and alimony burdens of $1200 per monthMy ARM has increased my mortgage payment by $800 per monthSecondly,you need to demonstrate how this hardship impacts your ability to makea mortgage payment. If you make $8,000 a month and your mortgage wentfrom $1000 per month to $1500 per month; good luck getting them toapprove a short sale! You need to show how the hardship pushed yououtside of your ability to make the payment.Banks often think ofmortgage payments in terms of percent of gross income, so you mightconsider using this. Let's demonstrate with an example. Assume yourmortgage payment is $1700 per month. Your household income was $5000 amonth and then you lost your job, and the new household income is$2200. This means that your mortgage payment went from a reasonable 34%of your income to a whopping 77% of your income. Any bank will look atthat number and say, "Yikes!"3. Gather supporting information and Market ConditionsThinkabout circumstances outside of your own that are impacting your marketarea. Remember, the bank will want to be certain other options havebeen exhausted - such as selling your house. You will need to show thatthis is also not an available option. This can be done by doing thingslike:Showing a recent appraisal of your homeUnderstanding comparable sales and the general market in your areaItemizing pieces of disrepair on the house that negatively impactthe properties market value (i.e. an old roof or broken A/C unit)If the house is on the market, how long it has been one4. Writing the LetterONE PAGE ONLY! Make sure you keep it concise - no lender wants to read a 4-page hardship letter. Get it into a single page!Keep it in easy to read paragraph format.The layout of your letter should look something like:Atthe top of the letter, put the bank's name and address. You might wantto address it directly to the loss mitigation department. Each bank hasunique ways of handling transactions so it helps to do some researchahead of time.In the RE: line, put in "Request for Short Sale", and your loan numberYour first paragraph should describe what happened briefly and makeit clear you are unable to afford the mortgage. Don't be ambiguous here- you can't afford it!RIGHT: "My family has gone through significant hardships recently that make it impossible for me to afford my mortgage.WRONG: "I recently lost my job and we have had to cut out cable TVand gourmet dinners.... it's getting really tough to afford ourpayments!Your second paragraph should talk about the market conditions that have driven down your home value3rd and possibly 4th paragraphs are details, details, details. Usethe information you gathered up above to make your case more clearly.Closing a- restate that you cannot afford the mortgage, and there are no other options besides a short sale.Make sure to sign and date the letter, and include your own contact information.5. Distribute!Send the letter to the appropriate party (bank, attorney, investor, or real estate agent you are working with).Oncethe letter is with the bank, you can feel confident that you built thebest possible case towards convincing the bank to accept a short sale! Article Tags: Hardship Letter, Mortgage Payment, Short Sale
How,Write,Hardship,Letter,That