3 Factors of Loan Modification Hardship Letters to Increase Approval Chances
The hardship letter is the most important part of the loan modification application process. As a homeowner finding it difficult to meet your monthly debts and obligations, you may need to consider getting financial relief in the form of a loan modification. The three most critical elements of a loan modification hardship letter are listed below:
1. Explain in detail, but without telling a sob story, the types of financial problems you are experiencing and how they occurred. If you suffered an accident, divorce, job loss, medical expenses, or any other reason, indicate that to your lender. The bank wants to know what extenuating circumstances led to the position in which you now find yourself.
2. Show a timeline documenting when your financial crisis began and the circumstances that caused them. It’s especially important to demonstrate to your lender that you were honoring our monthly financial obligations up until the time that your life status changed and your financial hardship began.
3. Demonstrate to your lender what you are going to do differently going forward to remedy your financial situation. Are you going on a budget? Are you going to skip vacation? Are you going to sell luxury items? Include your strategy for digging yourself out of your hole to your lender.
You get your chance to tell your story to the lender via the loan modification hardship letter. Write the letter and pay attention to details to ensure that it is accurate, free of typographical and grammatical errors, and is brief but detailed.
You can dramatically improve your chances of approval by utilizing the three items mentioned above when writing your hardship letter as part of your application for a loan modification.
