Write a hardship letter to defend against foreclosure by presenting a clear picture of the current situation, and explain the circumstances beyond control that have led to the inability to make mortgage payments, advises AllLaw. Examples of hardship include illness, job loss, military service, medical bills and natural disasters.Continue Reading
A hardship letter should include honest, personal information about the particular circumstances that justify a loss mitigation, says AllLaw. Start the one-page letter with a direct statement explaining the purpose of the letter. Then, outline any events that have led to an inability to pay the mortgage. Advise the lender how the situation arose and why it is beyond control. Express an intent to fulfill financial obligations, and state why the lender is best served by mitigating the loan.
The three general types of loss mitigation that lenders consider are a short sale, a loan modification and a deed in lieu of foreclosure, explains AllLaw. In each case, lenders look at hardship letters differently. In cases of a short sale or a deed in lieu of foreclosure, a lender is primarily concerned with the amount a sale of the property brings or whether any other liens exist. In cases of a loan modification, the lender wants assurance that payments can be made after they're altered, and the hardship letter should detail plans for ensuring this.Learn more about Debt Law