The main reasons people write letters of authorization are for medical, legal or financial issues. If a person is going on vacation, they may want to allow a friend or family member access to their bank account to pay bills. Other reasons a person may need to write an authorization letter are:
What to Include in a Hardship Letter Many people make the mistake of spending very little time thinking about and drafting their hardship letter or, even worse, they simply copy a sample letter off the Internet. Since the loss mitigation representative who will review your file has most likely read literally hundreds of these letters, it is imperative that your letter be genuine.
This does not mean that you need to write a lengthy sob story, but it does require that you be forthright about your situation.
In fact, the letter should not to exceed one page so that the reader does not lose interest. The intent of the hardship letter is to explain to the lender how you got into your current situation and how they can help you avoid foreclosure.
State your goal upfront by beginning with a sentence that includes the purpose of your letter. Next, describe the hardship in more detail. That is, explain to the lender how you got into the situation and why it was out of your control.
To end your letter, let the lender know that you want to live up to your financial obligations. In the case of a loan modification, let the lender know you intend on making regular payments once the loan has been modified.
If you are seeking a short sale or deed in lieu of foreclosure, state that you want to honor your financial obligation but that it has become impossible to do so and a short sale or deed in lieu of foreclosure is the best option for both you and your lender to prevent a foreclosure.
Things to Note Regarding Loan Modifications The importance of the hardship letter varies some depending on what type of loss mitigation you are seeking.
With a short sale, the main thing the lender will look at is whether or not the amount they will receive in the short sale is as much as or more than they expect to get from selling the property following a foreclosure. The likelihood of being granted a deed in lieu of foreclosure primarily depends on whether or not there are other liens on the property.
If there are multiple liens, a deed in lieu of foreclosure will likely not be granted. For these options, you just need to provide a simple letter that lays out the basics of your hardship. However, if you are seeking a loan modification, the hardship letter is more important.
The lender wants to know whether a loan modification will ensure that you will be able to make your house payment on time in the future. You will need to demonstrate that if the loan is modified, payments will continue uninterrupted.
Do this by providing the lender with your plan to get back on track with your payments, and show your lender that you will be able to continue to make your modified monthly payments.
When asking for a loan modification, it is a good idea to let the lender know that you have reduced your discretionary spending and have eliminated unnecessary expenses, such as cable television, eating out, and taking vacations. The lender will require that you make some sacrifices and the hardship letter is a good place to demonstrate that you have done that.
There is a fine line to walk when composing a hardship letter for a loan modification. You must show that you are in financial crisis without looking like a lost cause.
Often, people who are given loan modifications go into default again, and lenders do not want to go through the trouble of modifying a loan if they will have to foreclose anyway in the end. See Steps to Getting a Loan Modification for more information on hardships and other important considerations.
What Lenders Want A well-written, concise, and deliberately thought-out hardship letter works best.hardship letter templates you can download and print for free. We have tips on writing hardship letters as well as example letters, including hardship letter templates for mortagage, medical bills, immigration, and other personal and professional situations.
Writing the ‘Hardship Letter’ One of the items your Bank or lender will require from you during the loan modification process is a hardship letter. Writing a hardship letter is mandatory if you want your lender to consider you for a short sale, loan modification, and temporary repayment plan.
When you’re writing a hardship letter for loan modification, it is important for you to keep in mind that lenders know the reason you’ve fallen behind with your mortgage payments.
The lender will require that you make some sacrifices and the hardship letter is a good place to demonstrate that you have done that. There is a fine line to walk when composing a hardship letter for a loan modification.
You must show that you are in financial crisis without looking like a lost cause. A hardship letter is a critical element of efforts to convince a mortgage company that your circumstances merit further consideration and to persuade it to postpone or .
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