When a lender a requests a letter as part of your hardship package, you may be tempted to sit down and write something to explain all the intimate details of your situation and how you got there.
This is not what the lender wants!
If you make these five critical errors when you write your hardship letter, you'll make your negotiations more difficult than they already are.
Do not treat it as a personal letter. You have to set the right tone throughout your letter. This is a business letter...not a personal one. Regardless of how emotional you are about your situation, you must stay focused. The issue - as the bank sees it - is that you're behind on your payments.
They realize unfortunate situations are often what caused you to fall behind, but they don't need to hear every little detail of that situation.
Business letters are matter of fact rather than emotional. It may help you to write the letter as if you are writing it for a friend. Pretend you're writing about someone else's situation rather than your own.
Do not ramble on forever. You're very busy every day...we all are.
So is the loss mitigator you're dealing with.
They often work with 100 - 500 homeowners at a time. They have to keep all of those individual cases on track. They get paid to turn non-performing loans back into performing ones, so they are motivated to push as many complete, thorough hardship packages as they can through the system. When you write a two or three page letter, it takes them a lot of time to scan it and pick out the information they need to continue the process.
Do not leave out critical information. Your lender needs to know several items. Leaving any of them out will slow your hardship package down and wind up frustrating both you and your loss mitigator.
1. Your account number, current contact information, and the address of the property.
2. Why you fell behind in your payments.
3. What is your plan to get back on schedule (what type of workout you're seeking).
4. A brief overview of your income and expenses (a budget or other financial forms will be part of the hardship package, so you don't want to go into very much detail.)
5. Any anticipated changes (good or bad) in your income or expenses and when you expect them to happen.
6. Why you are committed to making this plan work.
7. If you have any money saved to put toward the workout plan.
8. If you sent in payments that were returned to you, they will want to know what you've done with those payments.
Do not send in your first draft. An effective hardship letter is one that gives the loss mitigator the information they need in the most succinct manner possible. To provide this, you need to:
1. Know what information needs to be in the letter.
2. Write your letter (first draft).
3. Edit it until you've taken out as much of the extra fluff as you can.
4. Re-write your letter and send it off.
Do not send it to the wrong address. As obvious as it sounds, make sure you send the letter to the correct address. You'll probably need to send it attention to your loss mitigator (or the Loss Mitigation Department) at a specific address. I recommend faxing the letter in first and then sending it by certified, return receipt requested mail as well.
Bonus tip...avoid trickling your information in. Most of the time, your hardship letter is just one part of the entire hardship package. Send the entire package in together rather than sending it in piece by piece.
Again...fax it and then send it by mail certified, return receipt requested.
Don't simply get delivery confirmation! Spend the extra few bucks and get the return receipt...you want to know WHO received the package, not just that it was received.
It's your home...don't lose it! Remember, your lender sees many hardship letters every day. You want yours to be memorable for the right reasons! Short, simple, and to the point will save them time and frustration and keep your package moving through the system.
"What Should I Write In My Hardship Letter?" this is a question we get in our office all the time and honestly there is not a short answer. In this article I will focus on exactly what not to tell your lender. For more information on writing a foreclosure hardship letter check out my popular FREE special report "How To Write A Killer Hardship Letter" available on my website.
DON'T SAY "I DESERVE IT"
First of all, your goal is not to convince the lender that you deserve a loan modification. Some people can't quite get a handle on this point, but you need to. Your goal is to convince your lender that the loan modification you are asking for is necessary given your financial situation and that it is going to work.
DON'T BLAME THE LENDER FOR YOUR DIFFICULTIES
At this point in the game you need the lender on your side. Taking responsibility you're your financial circumstances is more advantageous then trying to blame others - especially your lender.
Your hardship letter is not the place to air your frustrations about your lender or their collections department, foreclosure specialists or their choice of foreclosure attorney.
LIFE IS NOT FAIR - DON'T DWELL ON IT
Don't get caught up in how unfair life has treated you. I know it's very hard when you are in financial distress not to focus on your own misery. The "uniqueness" of your misery is really not the point, you need to get beyond that. Lenders do not modify loans because they feel sorry for you. They only modify loans because you have convinced them that you will be able to make the payments.
You may think it is "unfair" that your story sounds more or less like everyone else's. Life is unfair.
DON'T MAKE THREATS
This one should be pretty self explanatory. For example don't threaten a lawsuit unless you plan to file one. Also get your attorneys advice before using this threat since it could backfire on you. Threats of going to the media do not go over very well either.
Don't Seek Sympathy
Do not focus on explaining why all this happened or seeking sympathy since it doesn't matter why it happened. Your lender will do workouts when they make sense for the lender, not when they are moved to feel sorry for you. Present yourself as someone who has made a good-faith effort to rectify your current situation.
DON'T SEND A FORM LETTER
Ok, first I give you sample letters then I tell you not to use them. Here is my recommendation, don't just fill in the blanks, write in your own words about your own situation. Lenders don't care about polish; they care about your verified monthly budget. This is not an essay contest.
DON'T FLY OFF THE HANDLE
Pointing fingers, blaming, calling the lender names, etc., isn't going to get you anywhere either. Stay calm and business like.
DON'T TALK BAD ABOUT YOUR PROPERTY
Don't talk bad about the condition of your home - it's irrelevant to your lender. Many times I will see people listing off all the bad and broken, the leaky roof, moldy patio, outdated fixtures, broken appliances and terrible termite problem. They make it sound like the wall would fall in if the termites weren't holding hands.
By proposing a mortgage modification you are saying to your lender YES, I love my home and I want to keep it, will you help me.
BLAH BLAH BLAH - POOR ME
A good attitude is worth its weight in gold. Don't get caught up in over explaining your "unfortunate circumstances." Can you imaging how many hardship letters your lender reads every day explaining unfortunate circumstances in excruciating detail. Get to the point and get on with your letter.
Writing a hardship letter is not difficult when you know the elements which must be present and those better left out. I recommend using a worksheet like the one included in our popular FREE special report "How To Write A Killer Hardship Letter" which is available on my website. For more information on mortgage modifications, short sales and hardship letters visit our website.
Check out some of my other articles:
"Top 10 Mistakes People Make When Writing Their Hardship Letter And How YOU Can Avoid Them"
"Foreclosure Hardship Letter Part 1 - How To Write A Compelling Hardship Letter"
"Foreclosure Hardship Letter Part 2 - What Your Lender Really Wants to Hear"
"Foreclosure Hardship Letter Part 3 - What You Should NEVER Tell Your Lender"
Both Todd Temaat & Tom Mack are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Todd Temaat has sinced written about articles on various topics from Real Estate, Finances. Todd Temaat and his team have been negotiating with lenders to help homeowners keep their homes out of foreclosure for 10+ years. Now they're teaching owners the tricks to fight for themselves. Their most popular article describes. Todd Temaat's top article generates over 3600 views. to your Favourites.
Tom Mack has sinced written about articles on various topics from Finances, Debts Loans and Free Credit Report Score. Tom Mack simplifies the mortgage modification process. Find out more about Loan Modifications and “How To Write A Killer Hardship Letter” with his popular FREE Special Report, available at: =>. Tom Mack's top article generates over 12100 views. to your Favourites.