Homeowner Hardship Help Letter
Homeowner’s who are feeling that cold uneasy feeling of trouble ahead in making payments on their mortgage need to put on their big boy or big girl pants and get realistic early in the game. Feeling sorry for yourself may be a natural first reaction. Planning and taking action will do much more for your emotional and financial well being than self pity. The Homeowner Hardship Help Letter is a necessary step in stemming the tide. Think of the Homeowner Hardship Help Letter as that first tourniquet that stops the bleeding.
Communication is Critical
The Making Home Affordable program requires a homeowner hardship help letter as a first step. Lenders are not sentimental. If you have experienced a set back of any kind you need to spell it out in writing. Whether the set back be in the form of job loss, illness or emergency of any kind you must protect your most important asset. Put the mortgage holder on notice of your trouble before it gets out of hand. It is much better to be a little too early with this notice than a little too late.
Banks have loss mitigation departments. Their job is to protect the bank from losses. Their personnel are not paid to put borrowers on the street at the first sign of trouble. Simply put that would not be good business. Help them to help you by submitting a homeowner hardship letter. Explain why you have missed payments and propose a solution.
The basis for a mortgage modification is not the letter. The modification depends on the borrower’s financials and the mechanisms within the government and lender’s in house programs.
Rule of KISS
Too many details in the letter may inadvertently hurt the borrower. Remember what trial lawyers call the rule of KISS. “Keep It Simple Stupid.” The lender’s loss mitigation department is unlikely to finish or be swayed by a rambling excessively detailed letter anyway.
Why did you stop paying? You aren’t going to say you lost your money in the casino or drank it away…did you? You didn’t really try to rescue a fortune for a Nigerian Prince that was frozen in a foreign consulate bank account. Did you? If you did read no further. Neither I nor anyone else can help you. If the modification is to be granted you must offer a good reason. A job loss or cutback, a major illness or a nasty divorce are some prominent reasons with which anyone can relate.
And These are My Plans…
Make a Part II. State the steps you have taken and plan to take to mitigate the problem. Have you taken a part time job? Cut back on expenses in a major way? Taken in a boarder? What would you like to hear if you were in the bank’s position? If your home is underwater you can ask about a short sale. Write the letter in your own words even if you have a lawyer. Subject to the lawyer’s review of course. Your Homeowner Hardship Help Letter can be the foundation for a new beginning.