How do you write a hardship letter for a foreclosure?

A hardship letter should Start by stating the purpose of the letter whether it is a loan modification or a short sale so the lender knows what homeowners want. It should say something like “I need to restructure my mortgage and obtain a lower, fixed interest rate…,” in a way that force them to find out why.

What should a hardship letter say?

A “hardship letter” is a letter that you write to your lender explaining the circumstances of your hardship. The letter should give the lender a clear picture of your current financial situation and explain what led to your financial difficulties. The hardship letter is a normal part of the loss mitigation process.

How do you negotiate a deed in lieu?

First, approach your lender with sufficient proof of inability to repay your mortgage, and then offer a deed in lieu of foreclosure. Second, negotiate the terms of any reports to credit bureaus your lender may make after it accepts your deed in lieu.

How do I write a hardship affidavit?

Whether it’s an affidavit or a letter, include the following details: name, address, phone number, date, loan number; a short introduction asking for permission to sell your home in a short sale; hardship details and neighborhood comparable sale prices; assertion that the only other alternative is foreclosure; and a …

What is an example of hardship?

The definition of hardship is adversity, or something difficult or unpleasant that you must endure or overcome. An example of hardship is when you are too poor to afford proper food or shelter and you must try to endure the hard times and deprivation.

What is general proof of hardship?

Proving an economic hardship often requires a lot of paperwork as evidence. Evidence often submitted with an application include things like: proof of income (pay stubs, offer letter, etc.) proof of other income (e.g., alimony, child support, disability benefits) an expense sheet laying out all your expenses.

Which is worse deed in lieu or short sale?

A deed in lieu of foreclosure is different from a short sale because it transfers the property to the lender instead of selling it to a new buyer. Similar to a short sale, a deed in lieu of foreclosure likely will not damage your credit as severely as a foreclosure or a bankruptcy.

How do you complete a deed in lieu?

To complete the deed in lieu, the borrower will be required to sign a grant deed in lieu of foreclosure, which is the document that transfers ownership of the property to the bank, and an estoppel affidavit.

How do you write a strong letter of explanation?

How to write a letter of explanation

  1. Facts. Include all the details with correct dates and dollar amounts.
  2. Resolution. Explain how and when the situation was resolved.
  3. Acknowledge. It’s important that the letter outline why the problem won’t arise again. Recognize if and how you could have avoided this mistake.

What is a good letter of explanation for mortgage?

The key to writing a great letter of explanation is to keep it short, simple and informative. Be clear and write with as much detail as you can since someone else will need to understand your situation. Avoid including irrelevant information or answers to questions the underwriter didn’t ask.

How do you write a hardship claim for a deed in lieu?

Specify your hardship; it should be a circumstance beyond your control, such as job loss, underemployment or serious illness. You usually must attempt a refinance, loan modification or short sale of your home before a lender will consider a deed-in-lieu.

What is an effective hardship letter for foreclosure?

An effective hardship letter will show the lender that you have not recovered from your financial hardship and that you’re unlikely to afford payments in the near future. Establish that it’s better for you to move out of the home through a deed in lieu of foreclosure than to prolong your stay and undergo foreclosure proceedings.

What is a deed in lieu of foreclosure?

A mortgage lender may cancel your debt in exchange for your house keys in a foreclosure-prevention program known as a deed in lieu of foreclosure. It may require a hardship letter explaining your need to give up ownership of your home.

What should be included in a hardship letter?

A few key points in your letter will help the lender determine whether foreclosure is imminent and a deed-in-lieu is the right option. Providing too much information in a hardship letter can raise red flags with the lender.