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Financial and mortgage hardship letters, list of points to include
Are you preparing or getting ready to write a hardship letter to stop foreclosure or to just negotiate reduced mortgage payments. Below are some of the points which you may want to cover so that you can improve your chances of getting a positive result. (Please note that the information in this article is provided for your information only and should not be treated as professional advice. Please consult a licensed professional for that).
1. State what type of work-out plan you are proposing and state why you think this is the best option for you.
2. Give a brief explanation of any special hardship circumstances such as disability, death in the family, illness, natural disaster, etc. Focus on the important points about the hardships you face.
3. Explain what caused you to fall behind with your mortgage or loan payments. You need to show that you have had an involuntary reduction in income or an unavoidable increase in expenses. These include things like:
- Loss of income - Lay-off
- Bad self-employment year
- Reduction of wages or hours
- Increase in property taxes
- Death of a borrower
- Short-term or permanent disability
- Serious illness of a family member
- Unexpected urgent property repairs
- Increase in interest rates
- Unavoidable increase in expenses:
- Uninsured major medical expenses
- Lesser paying job/employment after a lay-off
- Natural disaster
- Unavoidable child care expenses
4. Provide details of your plan for getting payments back on track and convince or explain to the lender why or how you think the plan will work.
5. Provide details of any amount of money that you have set aside for this - if any.
6. Attach evidence of your income and expenditure or budget to support your plan. Be specific about what type of payment schedule you think you can keep or stick to.
7. Provide your contact information or if you are working with an advocate provide their name and contact information.