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Hardship Letter for Loan Modification: How to Write It Effectively

Why Might You Need Professional Help Write a Hardship Letter for Loan Modification?

Writing any kind of formal letter is a task that many people often have difficulties with. But, to create a good impression on the recipient for an important issue such as a hardship letter for immigration for an example, you need to provide essential information in the right way. Just like any professional business letter, this means getting to the heart of the matter without loads of waffle which only distracts the reader’s attention. In the case of a hardship letter for loan modification, poor writing skills not only hurt your sincerity, it may also cause confusion as to what you are actually asking for.

In the present economic downturn, there are roughly 1 in 6 homeowners whose mortgage is higher than the value of their property and struggle to make ends meet with loan repayments well over 50% of the household income. However, federal guidelines and the Home Affordable Modification Program (HAMP) both state that your loan payment should be less than 33% of your income. When thinking about writing a debt hardship letter though to get repayments modified, it isn’t the primary amount that gets reduced; it will either be the interest rate or the length of time the loan is extended.

when you need hardship letter for loan modification

When Might You Need a Loan Modification Hardship Letter?

Life isn’t always fair and you never know what’s around the corner. Financial problems can often leap right out of the woodwork at you anytime, causing a strain on your finances and while you try to struggle through a bad time, the best solution is often to write a hardship letter for mortgage payment reductions. Even if you don’t use it straight away and rely on savings, just like the gun argument though; it’s always better to have one and not use it than need one and not have it. Loan providers/mortgage lenders are not the soulless entities that people believe them to be, they understand that difficulties can arise suddenly and will help you as best they can. There could be many such situations that arise where they will only be too happy to help out such as:

  • Severe illness
  • Loss of job
  • Reduced income
  • Failed business
  • Adjustable interest rate reset-payment shock
  • Job relocation
  • Death of spouse
  • Incarceration
  • Divorce
  • Marital separation
  • Military duty
  • Reduced income
  • Medical bills
  • Damage to Property, natural or act of God not covered by insurance

How to Write an Effective Hardship Letter for Loan Modification

Writing a hardship letter to the mortgage company for a reduction in payments as well as hardship letter for immigration is not something you should rush over. In the application request, you will need to keep the tone formal throughout, even if you have initially been refused. Writing a loan modification appeal letter using strong language will only incite a strong negative reaction and will not get you anywhere. When drafting your letter for not paying debt, you want to include as much information as you can in a succinct way which highlights your problem. Give details of steps already taken to try and remedy the situation by yourself and let them know how much you can afford to pay. Looking then at how to write a hardship letter, there are no hard and fast rules at how they are presented.

They do however follow the basic principles of all formal business letters and the experts at LoanSafe agree it should be laid out as such:

  • Your address and date in the top left-hand corner. This is where the recipient will look to find your contact details for any further correspondence.
  • The recipient’s address one line below the date. If you are unsure of the full address, call their mitigation department first and find out who specifically you should send any official mail to.
  • Subject lines aren’t always necessary but it does make it easier for the recipient see straight away what the letter is about.
  • Leave a few lines and then open with a greeting or salutation. Dear Sir/Ma’am or dear Mr./Ms. xxxx if you have a contact name. Don’t, however, use first names; keep it on a professional footing.
  • Then we come to the main body of the hardship letter for a loan modification which is made up of three parts:
  • An introduction paragraph which explains who you are and why you are writing
  • A paragraph that explains in detail why you are requesting help with your loan. This will be where you should include details of job loss or severe injuries etc.
  • A closing paragraph that tells the recipient what action you have already taken to keep up with the repayments; exhausted savings, taken a second part-time job or made cutbacks elsewhere. This is also your opportunity to let them know how much you can afford each month; they will obviously want proof so make sure you include detailed receipts of all income and expenditure.
  • Sign off a few lines below the main body of text. This should be along the lines of ‘Sincerely’ or ‘Yours Sincerely’.
  • Underneath this, place your signature on your printed name. This gives an assurance that you stand behind the information included and because signatures are often difficult to read, your printed name allows the reader to see who is writing to them.
  • If you are going to enclose any other documents with the letter such as bank statements and receipts etc. These should be listed underneath your signature block with a brief description i.e. Enclosures (2); bank statement, weekly shop.

For a writing service that is number one at providing a hardship letter for a loan modification, get in touch with our experts here now for fast and friendly assistance that you can always trust and afford.