Do it right

Homeowners who wish to apply for a HAMP loan modification will need to explain to their lender what type of hardship they are facing and be prepared to sign an Affidavit under penalty of perjury as well.  The government bailout plan is designed to offer a lower mortgage payment to struggling borrowers, but it also seeks to weed out those homeowners who can afford their payments but are simply trying to save some money by getting a lower interest rate or reducing their loan balance.

The HAMP hardship explanation is part of the formal application form called the RMA- Request for Modification and Affidavit.  This 3 page form is standard for all lenders and it was designed by the federal government to be used for all applicants interested in the Home Affordable Plan.  This loan mod application form must be completed by all borrowers and includes a section to tell the bank what has happened to make the current mortgage unaffordable.  There are basically four categories to choose:

1. Reduced income – underemployment, reduced pay or hours, decline in
   

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   business earnings, death, disability or divorce

2. Increased expenses – mortgage payment reset higher, medical or health care costs, uninsured losses, increased utilities or property taxes
3. Excessive monthly debts – overextended with creditors, credit cards, home equity, other debt
4. Insufficient cash reserves – liquid assets are insufficient to maintain current mortgage payment and cover basic living expenses

There is also a space for an additional written hardship explanation on the RMA, and you can also use a separate sheet of paper to have room for a more detailed explanation.

HARDSHIP EXPLANATION TIP: Make sure you write your loan number on any extra sheets of paper, keep you hardship explanation to one page if possible, include your desire to keep your home and avoid foreclosure.  Be sure to SIGN this page too.

Sample Monthly Budget-Follow It

Applying for a HAMP loan modification can be confusing and frustrating if you do not know just how to prepare your application correctly-get help with the #1 resource for homeowners, The Complete Loan Modification Guide kit and loan modification software calculator.  Follow the step by step directions for completing your application correctly and use the calculator to generate your very own sample monthly budget to follow when filling out the required financial statement.  Visit

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MyLoanModificationCenter.com for more information.

Hardship Letter Tips

One of the required steps to qualify for a HAMP loan modification is writing a hardship letter.  This is a brief explanation of the circumstances surrounding your current financial status, and will let your lender know what has happened to cause the situation and also what you have done to try to overcome it.  The federal government requires every homeowner who applies for a HAMP loan mod to submit this explanation letter, and there are certain important categories that you need to be sure to cover.

Here is a sample that you can follow with the important phrases highlighted-of course you need to personalize this to match your own circumstances and so that it fits your unique situation.

Loan Modification Hardship Letter SAMPLE

Key Phrases

Date

Loan #, Borrowers Names, Property Address

To whom it may concern,

I am writing this letter to explain my current financial hardship situation and to request consideration for the HAMP loan modification program.  My mortgage payment is no longer affordable and I am at imminent risk of default if I do not receive some help.

The trouble first started about 6 months ago when my hours were cut at work, and my income was reduced.  My wife was laid off from her job, so as a result we lost more than half of our normal income.  She has been looking for work but has not been able to find anything, and I have also been looking for a second job.  The economy is very bad in our area, and there are just not many jobs available making it very difficult for us.

We have been using up our small savings account to make ends meet each month, and now we have begun having to use credit cards to pay our monthly expenses.  We will soon be out of money, and the increased payments on our credit cards are so high that we cannot afford to keep paying those either and our monthly expense keep getting higher.

Our home has lost so much value that we cannot qualify for any type of refinance program, and a loan modification is our only option.  We do not want to lose our home, our children are involved in their school and church and have many friends in the neighborhood.  It would be heartbreaking for us to have to uproot them.

We are hard working, responsible homeowners and we have tried everything we can think of, but we are desperately requesting your help to modify our mortgage to a more affordable payment.  We would like to be considered for the federal loan modification plan called HAMP-please help us to keep our families home.  Thank you,

Sign, phone number

Sample Budget-Automatically!

The HAMP loan modification requires that you also complete the official application form which is called the RMA-Request for Modification and Affidavit.  Page 2 of this form is the monthly budget for your household, and this is where you must breakdown your income, expenses and bank balances.  You must show the right amounts or you will not qualify.  If you are not sure how to prepare your monthly budget form correctly, you can use a sample monthly budget to follow.  This will show you how much income, expenses and bank balances are required to fit the approval guidelines for HAMP loan modification.

Need help with your HAMP loan modification application?  Do it right-use the #1 resource for homeowners, The Complete Loan Modification Guide kit and loan modification software calculator.  You receive everything you need to

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succeed: step by step directions, required forms and the loan mod calculator automatically generates your own sample monthly budget to show you how much income, expenses and bank balances are required.  Visit MyLoanModificationCenter.com for more information today.

Apply Correctly!

One of the critical parts of the loan mod application is called the Hardship Affidavit.  It is now part of the standard form that you must complete and submit for your lender’s review.  This form is called the Request for Modification and Affidavit, or RMA.  It was designed by the Treasury Department for use with the government subsidized loan workout plan, which is called HAMP.

How do you complete this loan modification Hardship Affidavit correctly?  There are boxes that you can check depending on which one most closely matches your own situation-for example:

1. Household income reduced
2. Expenses have increased
3. Monthly debt payments are excessive
4. Cash reserves-checking & savings-are insufficient

There is also a space to write an explanation of what exactly has transpired and what steps you have taken to try to remedy the situation, but since it is only two lines, most of the time you will be better off to write your letter of explanation on a separate piece of paper.

Know the Guidelines

IMPORTANT TIP:  keep your loan modification Hardship letter to one page in length and be sure to sign it on the bottom.  Your letter should include one of the above categories, and it may include all of them!  Begin the first paragraph stating the “due to financial hardship I would like to apply for a loan modification under HAMP or any other program I may qualify for”.  If you specifically ask for the government plan then the bank is mandated to review your application for eligibility.

Suffering a financial hardship situation will not guarantee that you will qualify for a loan modification.  Although it is one of the main requirements, you must also prove that your monthly income, monthly expenses and bank balances all fit within the standard approval formula used by the banks.  This is a mathematical equation that is used to determine if your loan can be modified using the standard Waterfall Method.  If your do not prove in black and white on your financial statement that your income is sufficient to fit into the formula, then chances are not very good for you to be approved.

Sample Budget-Automatically!

You can get help to complete your loan modification application and increase your chances of approval – the #1 best selling resource for homeowners provides you with step by step directions and also a loan mod software that automatically calculates a sample budget.  The Complete loan Modification Guide kit and Loan Modification software will save you time, frustration and give you the help you need to prepare an accurate financial

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statement.  Visit MyLoanModificationCenter.com for more information so you can get started today.

Know the 3 critical elements of a hardship letter

When you apply for a loan modification you will be required to write a brief description of your current situation and why you need help with a loan workout.  This is called a loan modification hardship letter, and it is very important that you explain your circumstances correctly so that your lender will be apt to approve your application.  Here are some important things to include in your letter of explanation.

The application for the government loan mod plan is called an RMA – Request for Modification and Affidavit.  The hardship letter is part of the affidavit section of this application form.   This is your chance to explain why your mortgage lender should give you a new lower monthly mortgage payment.  there are certain circumstances that all banks are looking to see, and the federal government loan mod plan has specific issues that qualify homeowners.  Here are a few of the important things you need to cover in your explanation:

Loan Modification Hardship Letter Key Things to Say

1. The most common reason for payment hardship is loss of income, reduction in income.  This could be from loss of job, fewer hours worked, divorce or military deployment.  If this has happened to you, give a brief explanation of what happened and how you have tried to supplement your income to make ends meet.
2. Higher Expenses is another valid reason.  This could be from medical bills, using credit cards to pay daily living costs or other unexpected expenses.  Also, if you have an adjustable rate mortgage and your monthly payment has increased due to the interest rate, that is a good reason for a loan modification approval.  Use a paragraph in your letter to explain how your expenses have gone up and how that has affected your ability to pay your mortgage.
3. Depleting your savings account to pay monthly bills is a valid loan modification hardship reason too.  Many people have used up all of their savings accounts and even gone into their retirement accounts in an effort to pay their unaffordable mortgage.  Once that money is nearly gone, there may be no other option but default.

Know the Guidelines

The most important thing to keep in mind when writing your loan modification hardship letter is that you are painting a picture for your lender that demonstrates you have exhausted all other options, but due to circumstances out of your control the only remaining option to save your home is a loan modification.  Keep in mind that the counselors read thousands of these letters, so try to be descriptive but short.  One page is ideal, two pages maximum.

Not sure how to qualify for a loan modification?  Loan Mod Quick App software takes the confusion out of preparing your application.  This helpful tool takes the guesswork out of qualifying by figuring your debt ratio, target payment and other important calculations for you.  Why take chances with your application?  Simply input your unique financial information into the

Easy to Use-Avoid Mistakes!

Loan Mod Quick App and it calculates it all for you!  You can save hours of time and avoid costly mistakes.  The Complete Loan Modification Guide kit is the best selling do-it-yourself system that includes the software, handbook, forms and much more.

Susan Gregory is the author of two resource books for homeowners and real estate professionals, the best selling The Complete Loan Modification Guide Kit & Software and The Stimulus Book-HAMP & HAFA Edition.  She also teaches workshop training classes for the federal programs to help real estate professionals assist homeowners with home retention and exit strategies.

Download immediately!

The Complete Loan Modification Guide kit provides a valuable resource for borrowers that includes a step by step handbook, required forms, and a loan modification software program that mimics the federal approval triggers for loan modification.  An advocate for homeowners, Susan also offers free 30 day email support for all of her clients who purchase her publications.  Thousands of homeowners have been helped using these materials.  Visit http://www.myloanmodficationcenter.com for more information.

If you have a Wells Fargo mortgage that you can no longer afford, then you may need to apply for a loan modification due to financial hardship.  The current economic recession has caused millions of borrowers to fall behind on their home loan payments because of a chance in their financial circumstances.  You will have to apply for a loan workout and explain why you need help-here are some tips to help you gain the banks cooperation.

What is an acceptable loan modification hardship situation?  There are many reasons why your current mortgage may now be unaffordable-but there are some standard and acceptable reasons that Wells Fargo will look for.

1. Reduction in household income-this could be due to loss of a job, reduced hours, or loss of benefits
2. Higher Expenses-if your mortgage payment has increased due to an adjustment in the rate or if you have had unexpected expenses that were out of your control.
3. Depletion of Savings-you may have been subsidizing your income with your savings account so you can make ends meet.  Using up your reserves is a good reason to ask for a loan modification.
4. Using Credit Cards to Pay Expenses:  If you have had to pay for day to day living expenses by using your credit cards, then this shows the bank that you are going deeper into debt in order to try to stay afloat.

Know the 3 critical elements of a hardship letter

You will be asked to sign a Hardship Affidavit and write a brief letter explaining your circumstances when you apply for your Wells Fargo loan modification. It is important to write a compelling and descriptive account of what has happened, but it should not be too long.  Usually keeping it to one page will ensure that the bank will actually read it.

One thing to remember, loss of equity in your home alone does not qualify for a loan modification hardship.  Think about it this way, when your home was going up in value the bank did not ask to share in your increased equity.  They do not expect to lose money now that the value has gone down.  Only a valid and reasonable change in your financial circumstances will convince Wells Fargo to offer a loan workout to you.

Prepare your application correctly!

Susan Gregory is the author of two resource books for homeowners and real estate professionals, the best selling The Complete Loan Modification Guide Kit and The Stimulus Book-HAMP & HAFA Edition.  She also teaches workshop training classes for the federal programs to help real estate professionals assist homeowners with home retention and exit strategies.  The Complete Loan Modification Guide kit provides a valuable resource for borrowers that includes a step by step handbook, required forms, and a software program that mimics the federal approval triggers for loan modification.  An advocate for homeowners, Susan also offers free 30 day email support for all of her clients who purchase her publications.  Thousands of homeowners have been helped using these materials.  Visit http://www.myloanmodficationcenter.com for more information.

Your Loan Modification Hardship Letter will explain your family’s current financial position. The federal stimulus plan requires that you be facing a hardship situation in order to be eligible to apply for a loan workout. This very aggressive program-called HAMP- features interest rates as low as 2%, loan terms up to 40 years, and in some cases part of your principal balance may be deferred or forgiven to help you stay in your home.  You don’t want to miss out on this government bailout for homeowners.

Your bank wants to know what has happened in your life to cause the problems.  This is your opportunity to explain to your lender the circumstances that caused the hardship and what steps have been taken to deal with the problem. A compelling Loan Modification Hardship Letter tells the lender whether your family has experienced an “acceptable hardship” and can assure the bank that if given the chance, the home loan payments will be paid on time from now on.

Wondering just what is an acceptable hardship? Here are some of the acceptable hardships:

1. Loss of job or reduction in income 2. Death of the homeowner, spouse or family member 3. Illness of homeowner or family member 4. Divorce or separation 5. Forced job relocation by employer 6. Adjustable rate reset-payment shock 7. increased expenses

But, how do you write a convincing loan modification hardship letter that is concise but also tells the lender everything they should know about your family’s situation? Keep in mind that lenders are inundated with frantic homeowners trying to find an affordable alternative to keep their home. They have heard and seen it all, so here are some tips for a successful Loan Modification Hardship Letter:

• Don’t be too long winded- 1 to 2 pages at the most
• First, describe the hardship and the circumstances that caused it – make sure that you include the approximate time frame that you first began to experience difficulties. This should tie in with any late payments you may have. Establish the connection between the circumstances and any delinquencies
• Explain what steps have been taken to correct the situation
• Provide the lender with your plan to get back on track and stay there
• Assure the lender that you are a responsible homeowner who just needs a second chance and that you are very motivated to save your home-provide a few details about your involvement in the community. Briefly tell about your child’s school or sports activities, your church involvement-lenders are concerned about maintaining the integrity of neighborhoods and communities

Millions of homeowners are in the same boat-how you choose to deal with your current situation makes the difference between success and failure. Informed and proactive homeowners can work directly with their lender to successfully lower their rate, modify the term, or reduce principle to arrive at a new lower monthly payment. You don’t need a lot of experience, just some knowledge about the process and how it works-you could save thousands of dollars. Take advantage of a software program designed just for homeowners that does all the calculations for you-avoid costly mistakes.

CAUTION! Writing a convincing hardship letter is just one part of the loan modification application. You will also be asked to show your income documentation and complete a financial statement. Before you contact your lender about a loan modification, get informed and be armed with the insider information and negotiating tips that give you a fighting chance of success. Learn the approval guidelines for the Obama stimulus home saver plan before you complete your application. There is a standard 4 step formula lenders use to determine if you qualify-you can learn and use this very same formula to make sure you fine tune your application and qualify for help.  You can take advantage of the #1 resource for homeowners-the Loan Mod Quick App software actually mimics the federal guidelines for approval.  All you need to do is input your own income and expenses, and all the calculations are done for you automatically.

Don’t feel overwhelmed or confused.  You can get the help you need to prepare your own accurate and acceptable loan modification application. The Complete Loan Modification Guide kit is the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs. You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions. Why take chances with your application? Simply input your unique financial information into the Loan Mod Quick App and it calculates it all for you! It couldn’t be easier-end the frustration-Visit myloanmodificationcenter.com and order today.

Federal Plan

he federal loan modification plan, called HAMP, requires that you provide a hardship letter detailing why you can no longer afford your current mortgage payment.  This letter must include certain information in order to meet the approval guidelines.  When you sit down to write your own letter of explanation, be sure that you include everything your lender will need to see.  It is critical to explain what has happened to your finances so that you will be viewed as a good candidate for a loan modification.

Here is an easy to use outline that will help you to put your thoughts in order and then write an effective explanation of what your current financial situation is and why you need a loan workout.

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Use this outline to help you create your Hardship Letter.

Identify the cause of current payment hardship- check all that apply:

Unemployment Military Service

Separation Payment increase-Rate reset

Divorce Illness

Death of Spouse Incarceration

Death of a family member Damage to property

Too much debt Loss of income/overtime/etc

Medical Bills Other- specify

Job Relocation

Business Failure

We believe that our situation is Temporary Permanent

Use this area to provide answers to the following questions regarding your situation. This will help you to remember details when you write your letter

When did this difficulty first begin?

What caused this difficulty and what have you done to try to remedy it?

Why do you feel your situation has improved, and that you will be able to afford and stay current with your new mortgage payment?

A couple of more tips are to keep it short-don’t go on and on.  The bank reads thousands of letters a day.  They don’t have time to read a novel-one page long is plenty.  Use key phrases in your letter:

Using the phrase, “Imminent risk of default if we are not given help” and increased expenses, lower income and using up our savings to live are all important terminology which can help your case with your lender.  Your goal is to paint a picture for your bank that through no fault of yours it is no longer possible to afford your current mortgage payment.

The loan modification hardship letter is just one of forms required, in order to have the best chance of getting approved you need to prepare a financial statement that meets the federal guidelines.  You can get help to do this easily and correctly with the #1 resource for homeowners, The Complete Loan Modification Guide kit.  Don’t allow frustration and confusion to get in the way of saving your families home.

Get the help you need to prepare your own accurate and acceptable loan modification application. The Complete Loan Modification Guide kit is the best selling do-it-yourself system that takes the guess work out of preparing your financial statement, hardship letter and all of the required forms your lender needs. You get an easy to use software program-Loan Mod Quick App-as well as an easy to understand handbook with step by step directions. Why take chances with your application? Simply input your unique financial information into the Loan Mod Quick App and it calculates it all for you! It couldn’t be easier! Visit myloanmodificationcenter.com and order today.

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You may not know it, but your lender is looking for key phrases in your explanation of the financial circumstances that you are facing.  If you can make it easy for your bank to see that you are a good candidate, your application will move through the system much faster.  When writing your hardship letter for loan modification make sure you include the key phrases your lender needs to see.  These “trigger” phrases tell your bank immediately that you are a good candidate for a loan workout.  Remember, a loan modification is not something your bank is required to give you-they will only consider modifying your loan terms if you can prove to them that you are a deserving and qualified borrower.

Your lender wants to help qualified and deserving homeowners-so how do you convince them that you are a good candidate?  Here is one of those important phrases you should include in your hardship letter for a loan modification.  You don’t have to write it this way verbatim, but the general idea is, “I am at imminent risk of default if I do not receive some assistance”.  This tells the bank that foreclosure is knocking on your door and if they don’t provide some kind of relief you may lose your home.  This is very important if you are not yet delinquent, but facing the prospect of a higher mortgage payment due to interest rate reset, or perhaps the loss of income.

One other key element in your hardship letter for loan modification is the reason you can no longer afford your monthly mortgage payment.  These phrases concisely explain that:  “reduction in income”, “loss of employment”, “increased expenses”, and then you can go into some short details about what happened to you.  You don’t want to go on and on-the counselor does not have time and will not read it anyway!  That is why it is important to use these trigger phrases in your letter so that the reader will be able to immediately identify you as a good loan workout candidate.

Running out of funds is another key trigger.  Perhaps you have been “depleting your reserves, savings accounts, borrowing from retirement accounts, to meet your monthly expenses”, that is the sign of a hardship situation.  Also, if you are “using credit cards to pay daily living expenses”-again, more evidence of an acceptable financial hardship situation for your letter.  The main criteria is to present your situation honestly and be able to backup your story.  Not every homeowner can or should get a loan modification.  But if you are in a desperate situation and have no other options, you really need to work hard, learn the process and submit your own application to your lender.  Hundreds of thousands of homeowners have already received a loan modification, you can too.

Learn all of the trigger phrases and get the help you need to apply and qualify for a loan modification by ordering the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read, home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. You also get 30 days of email support to ask questions, a series of insider tips and a monthly newsletter to keep you up to date on program changes.

Home Edition Loan Modification Kit with Customer Assist

Learn how to qualify for the Obama Federal loan modification plan. Need help completing your loan modification forms?  Find out about our Customer Assist program-you work one-on-one with your very own expert to make sure your application is completed correctly. Get started today on the path to secure home ownership, order The Complete Loan Modification Guide. For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com