Letter of Financial Hardship to Stop Foreclosure
The real estate market crash resulted in a sudden rise of foreclosures as the home owners struggled hard to repay the committed mortgage loans.
In order to curb further damage, the government intervened and came up with certain programs that helped in delaying or reducing repayment interests or refinancing the home or initiating the short sale process.
In order to stop the foreclosure, the homeowners need to submit a letter of financial hardships and request for modification of mortgage loan terms.
The letter should be able to convince the mortgage company; otherwise, it can be rejected.
It is important to note that homeowners need to write a letter even before the proceedings start.
The fact is that mortgage companies are also not generally interested in foreclosures as they lose considerable amounts of money while auctioning the homes and selling them at a price much lower than what they can get.
It is also advisable for the homeowners to contact the mortgage lender well in advance if they expect that they would find it difficult to pay back the mortgage amount on time for the next 1 or 2 months.
In this case, the mortgage lender may refrain from charging penalty for delayed payments and may be willing to wait for sometime before which the homeowner would catch up with the pending repayment amount.
Sometimes, the homeowner may realize that it is impossible to repay the current value of the mortgage installments.
In this case, a letter should be written stating the reason for the delayed repayments.
Homeowners need to provide enough proof for the same like housing documents, income tax papers, mortgage documents and also the budget that would clearly explain the reasons for financial hardships.
In addition, the homeowner should place a request to the mortgage company to modify the repayment installment amount to suit the current financial situation and also make it affordable.
A well written letter can convince the institution to stop the foreclosure proceedings.
However, provision of substantial proof is the most important aspect for getting the mortgage lender to agree to your terms.
The homeowner can also buy time from the mortgage provider to sell the property on short sale.
When you are writing the financial hardship letter to your lender, keep in mind the following important points: • Write the subject line clearly giving a brief idea of the purpose behind the letter and the reason for submitting it.
• Use personalized language to clearly explain the financial problems faced by the owner and the reason for default in mortgage payments.
In order to curb further damage, the government intervened and came up with certain programs that helped in delaying or reducing repayment interests or refinancing the home or initiating the short sale process.
In order to stop the foreclosure, the homeowners need to submit a letter of financial hardships and request for modification of mortgage loan terms.
The letter should be able to convince the mortgage company; otherwise, it can be rejected.
It is important to note that homeowners need to write a letter even before the proceedings start.
The fact is that mortgage companies are also not generally interested in foreclosures as they lose considerable amounts of money while auctioning the homes and selling them at a price much lower than what they can get.
It is also advisable for the homeowners to contact the mortgage lender well in advance if they expect that they would find it difficult to pay back the mortgage amount on time for the next 1 or 2 months.
In this case, the mortgage lender may refrain from charging penalty for delayed payments and may be willing to wait for sometime before which the homeowner would catch up with the pending repayment amount.
Sometimes, the homeowner may realize that it is impossible to repay the current value of the mortgage installments.
In this case, a letter should be written stating the reason for the delayed repayments.
Homeowners need to provide enough proof for the same like housing documents, income tax papers, mortgage documents and also the budget that would clearly explain the reasons for financial hardships.
In addition, the homeowner should place a request to the mortgage company to modify the repayment installment amount to suit the current financial situation and also make it affordable.
A well written letter can convince the institution to stop the foreclosure proceedings.
However, provision of substantial proof is the most important aspect for getting the mortgage lender to agree to your terms.
The homeowner can also buy time from the mortgage provider to sell the property on short sale.
When you are writing the financial hardship letter to your lender, keep in mind the following important points: • Write the subject line clearly giving a brief idea of the purpose behind the letter and the reason for submitting it.
• Use personalized language to clearly explain the financial problems faced by the owner and the reason for default in mortgage payments.
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