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How to Write a Hardship Letter

For a loan modification to get through, you have to submit some documents to the lender. The most important of these is the hardship letter. Whether you are submitting for a federal loan modification in New York, New Jersey or anywhere else in the United States this document gives a clear picture of the misfortune that has befallen an applicant and the severeness of his situation. This can give an applicant an edge over others in procuring a loan and therefore it is of utmost importance that a lot of time and thought is put into writing a hardship letter. In this article we are just going to focus on borrowers in New York and New Jersey.

There are 4 kinds of situations in which a hardship letter for loan modification applicants is extremely important:
  • Getting a lender to give consent to a particular modification contract
  • Getting a lender to consent to a contract regarding forbearance
  • Getting a lender to consent to a short sale
  • Getting a lender to consent to a foreclosure deed-in-lieu
So here you must keep in mind that the first and foremost thing to consider before writing a hardship letter is to decide what you are appealing for specifically. In New York and New Jersey there are plenty of ways in which you can avoid foreclosure but not all of them guarantee that you'll be able to keep your home. Therefore, research is the key to success. Find out what it is you need from your lender and appeal to him through a hardship letter highlighting the adversity that has befallen you. Rigorousness in this regard can mean the difference between saving your home and losing it!

So what exactly does a good, convincing hardship letter look like? Good question! To ensure applicants for loan modifications in New York and New Jersey meet with success, they have to write a letter that fully illustrates the bad luck and hard knocks they have suffered. Giving valid reasons can go a long way. Explanation for falling back on payment for reasons such as loss or change of job, tragedy such as death in the family, job transfer resulting in increase in mortgage payments, a health related issue that has been going on for some time all qualify you for serious consideration by the lenders.

It is always best to get a short sale on your home, or a forbearance agreement rather than going for foreclosure. Point this out to your lender! Lenders in New York and New Jersey will be even more willing to give you a loan if you show them that you'll be able to repay your way out of your current situation, say, in the next 6 months.

Do not feel embarrassed talking about your bad luck; at one point or the other we all suffer from financial instability. Give details of how you came to be in your present misfortune position. Provide a list of reasons how you have tried to stay afloat and fight the financial crunch you are facing.
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