Several people must have come across the term “Hardship Letter” in the past, but how many people really understand what it means and how does one compose this letter? A hardship letter is a letter that is addressed to your lenders in order to delay or re-negotiate the terms of your mortgage payments when you’re not able to pay the payments promptly.  It can also be used to convince your lender of the need for approving a short sale.

It is a letter that explains the reasons and causes for why payments have been missed. It proves to be a process that may help you obtain a solution for your circumstance with your lender. To ensure the hardship letter serves its purpose, it must be well-written. We will examine five useful steps and ways to compose an outstanding hardship letter that will help you stop your home foreclosure.

1) Determine if you want to write the hardship letter yourself, or retain a consultant that will compose it for you. Employing a consultant might prove to be costly, therefore it is best that you compose the letter yourself, however make sure that you research before you start in order to make sure that you compose your letter correctly. If possible obtain a few samples from a real estate agent to guide you when you write your letter. . The more personal the letter is, the greater your chances tend to be to deal with your lender.

2) Be absolutely truthful when you compose your letter. You will be responsible for what you write, therefore make sure all the details and data that you provide in the letter are genuine and not fabricated in any way. It may be hand-written, or typed-out.

3) Offer all the appropriate information that may be required for the lenders to analyze your application. Important information consists of date, personal details such as address, contact number, loan agreement and details, explain your current financial scenario and why you have failed to pay your monthly payments, as well as supporting documents and data. Many of the details that your creditors will look for are: pay-cuts, retrenchment, an increase in expenditure that is beyond your control, and other similar situations.

4) Recommend a solution to your lender, to assist you catching up on missed payments. Request a temporary postponement of payment. Or even better, try to negotiate an improved deal with them that will help you reduce your monthly commitment until your finances improve.

5) Contact them after a couple of days to check if they have received your letter. Request a face-to-face meeting to work out a solution. If your first hardship letter is rejected, you should send another letter before opting for other options.

Using a hardship letter to prevent foreclosure is a proven method, and has helped thousands of households save their homes in the past. You could be one of them as well!

If you find that your best option is to sell your home then we may have an option for you.  We buy houses in any condition or situation, even if you owe more than your house is worth.  Go here to fill out our online form to get started or call us at 612-217-4047.

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