The number one thought on many of my clients mind is: “What is a Hardship Letter” and what am I supposed to write in it”? I am a 35 year veteran of the Real Estate and Mortgage Industries. My work as a consultant has changed dramatically in the last 3 years. The normal information people were looking for before 2007 was related to buying or building homes, getting mortgages, and finding good interest rates.
But, today everything is different. We have moved a mile to the other end of the spectrum. First we watched the “mortgage meltdown”, watched in horror as millions of families lost their jobs to the economy and then their homes to foreclosure. These circumstances placed the Lenders into fragile positions as they took on too many foreclosed homes. Today, as Lenders and politicians see that the economy is endangered by the mass of foreclosures, we see a concerted effort to “save” homes from foreclosures.
If you are facing foreclosure, then you have probably received letters from your Lender demanding you catch up all of your back payments or lose your home. This payment of all past due money is actually a process called reinstatement. If you pay up all of your past due payments, your are current.
But, what if you don’t have the cash to catch up? It is really silly to try to try to force someone who is several months behind in their payments, to come up with the money to get current immediately. If there are employment or income issues, illness, or bad mortgages that caused you to get behind, then how can you come up with a lot of cash? Your credit has probably been damaged and you can’t possibly get a refinance on your home.
There is a way. It is called a Home Loan Modification and there are hundreds of thousands of them being done all over the country. The Modification process is a way of changing the terms of your loan to lower your interest rate; lower your payment; put your back payments back into your loan, so that you can pay them back over time. You can also fix your interest rate, so that your payment can never be raised again. If you have one of the “bad” Adjustable Rate Mortgages (ARM) your interest rate will be lowered and will remain the same through the term of your loan. This is called a Fixed Interest Rate.
To get a Home Loan Modification, you must apply for it. To put together an application for a Modificationyou start with a Hardship Letter. The Hardship Letter is a letter that explains the circumstances that caused you to get behind in your payments, and why your current circumstances would allow you to make payments if you could be given a more affordable payment to make. This is the first item needed for a Loan Modification,it is the introduction to the application, so to speak. But, it is just the first step.
The Hardship Letter must be carefully thought out. You can be turned down if it paints to bright of a picture of your financial condition. You can also be turned down if the letter shows your situation to be too bad. It can be best to have a mortgage expert in modifications help you with it.
It is also best to remember that although the Hardship Letter is a very important part of a Home Loan Modification, it is still only one part of a complicated application. A Hardship Letter will NOT get you a Home Loan Modification. There is a great deal more.
First you must Stop Your Foreclosure and make sure it is absolutely postponed or suspended long enough to give your time to get your Modification Application submitted and accepted by the correct department at your Lender. Customer Service at your Lender can’t do this and won’t do it.
Next you will need to supply the necessary documents to support everything that you have said in yourHardship Letter. If you leave something out, or supply conflicting information you can be DENIED.
It is true that you can put together an application yourself. But, if you make a mistake and are denied, it is much more difficult to get your Lender to look at the situation the 2nd time.
During your modification period, it is very likely that you will not make any monthly payments. This period could last from 60 days to a year, depending on which Lender you owe. You could be saving this money for when your payments begin again if you are smart.
Most Lawyers and Modification Professional Companies charge $ 2500 to $ 4500 to help you with your modification. In the author box below, you will see that it can cost less than to get the right help than you think.
Danny Hammond is a Real Estate Broker; Home Builder; and Mortgage Broker. He works as a consultant helping families keep their homes out of foreclosure and getting affordable payments. He is now referring clients to TOTAL FINANCIAL SOLUTIONS, which is a company that specializes in helping you throughout your foreclosure process. While they do charge a fee, it could be as low as $ 499 which is probably far less than your current monthly payment on your house. They can save you more than they cost! If your situation requires it, you can divide this cost into payments.
Let TOTAL FINANCIAL SOLUTIONS help you with your application the first time. But, if you have been denied, theyare the very best at putting together the best 2nd application.
Contact TOTAL FINANCIAL SOLUTIONS at: http://www.mortgagepaymentmodifications.com
Email: mortgagesolutionstoday@gmail.com
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