Need Mortgage Refinance

Hardship Letter and Key Questions to Evaluate

Many people are finding it difficult to explain why or how they came to be in a position of struggling to meet their mortgage payments, problem is if you are applying for a loan modification then this part of the requirement and you have to provide a reasonable and honest explanation for why you are struggling.

You will find a template for putting together a hardship letter in one of the previous posts on this site called Hardship letter template for a loan modification request.

For further information I have included a link at the top of the page to an article that explains what information you need to add to a hardship letter when explaining how you came to be in financial difficulty. The article is very well written and tells you exactly which questions you need to answer with respect to explaining your difficulties from a lenders perspective, which is of course the perspective you need to understand and satisfy.

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The first thing your loan servicer will do to see if you are eligible for the loan modification program is establish if the loan you have meets the terms for loan modification and if it does:

They will ask about your current income, what assets you have, if any, and any ongoing expenses. What they want to know is whether you will be able to make any new payments that will be due after loan modification by understanding your specific circumstances. Anything you tell them will eventually need to be supported by documented evidence i.e. tax returns, pay stubs etc.

They will also need to establish that your monthly first lien mortgage repayment does not exceed 31% of your gross monthly income.

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