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Writing A Sample Letter for Loan Modification Application
Are you looking for a sample letter for loan modification application? So are half of the homeowners in the country. The letter you send in with your loan modification application is just as important as the application itself, if not more so. Here is a great sample letter for loan modification application for you to take example from:
Name:
Loan Number:
Address:
Phone Number:
Email Address (if applicable):
To Whom It May Concern:
I’ve sent this letter to you in order to explain my reasons behind requesting a loan modification on my mortgage. Before last year, I had never made a late payment on any of my monthly expenses, but after the death of my husband things have been increasingly difficult to handle. I am requesting an interest reduction down to 6.25% from my current 8.80%. I feel it is a fair percentage for you, and it is just within my means.
Before my husband passed away, we had both been making more than enough to afford our mortgage. Once our interest rate rose to 10.24% and we had no difficulty paying it. However, once he passed away I was left with half of the monthly income I had before. I had been pulling together enough to pay the bills and mortgage by pulling from our savings and the small amount of life insurance I received, but I’ve run dry and have no other option than to request a manageable, fixed interest rate from you.
Without a reduction on the interest, I will not be able to afford the monthly payments. I have to choose between a loan modification and a foreclosure. I would far prefer the former, and you probably would as well. 6.25% is the most I will be able to manage, even if I cut all of my expenses out of the picture. Please consider my application seriously and I hope to hear more from you on the matter.
Sincerely,
Your Name
Notice this sample goes a little in depth about the circumstances of the homeowner seeking loan modification. What’s more, she also has determined her ideal interest rate based on her current income, showing her lender that she is taking the matter very seriously and wants to work with the lender to stay in her home.
While this sample letter for loan modification application is not perfect, it pleads a good case to the lender and puts it all on the table. Your lender needs to know it’s either modification or foreclosure and there is no way around it. They may lose money on a loan modification, but they lose much more on a foreclosure. Get all of your facts, story, and numbers straight and even you can write a compelling hardship letter.
Sample Loan Modification Hardship Letter
The loan modification process can be quite intimidating. You have to fill out all kinds of paperwork, negotiate on terms with your lender, as well as write a letter stating hardship. Out of those three main steps, the letter is the most difficult to do on your own. To give you an idea of how your hardship letter should look, here is a sample loan modification hardship letter to give you some guidance:
To Whom It May Concern:
This letter is to formally follow up on my application for loan modification I sent in to you last week. The application states what we had and what we are looking for, but obviously does not go into how exactly we got into the situation we are in now.
There were severe cutbacks at my job in November and I was transferred to a lower paying position in the middle of other people getting laid off. I should be grateful, but the salary I receive in this position is ¾ of what I was previously making. It had gotten to a point where we were pulling from our savings and scraping change to be able to make our mortgage payments and pay the bills. Two months ago our interest rate went up from 7.45% to 10.35% as we have not been able to manage and keep up with our payments since.
I would like to request our interest rate be lowered to anywhere from 7.25% to 8.40%. We feel this is a fair number to both parties. We were always punctual with our payments before my demotion and my wife is due for a raise next month. We are willing to work with you in finding a compromise that we can both agree on.
Sincerely,
Your Name
It’s important to stick to the facts in these letters, and this sample loan modification hardship letter does not veer off from the point: I simply cannot afford the high interest rate in my current situation. Be sure you mention why you are having problems with your payments and make it clear that there is no way for you to be able to manage as you are now.
Also be sure to mention the rate you would like. Your lender doesn’t have time to sift through every application and determine the exact rates they want.
Stating the interest rate you’re looking for gives them even more of a reason to accept you, because you have determined the interest rate you can handle on your own. It also shows that you are worried enough to have done the work to determine your ideal rate. Use this sample loan modification hardship letter as an example and work around it. A good letter can make all the difference.