In this series of articles I will walk you through everything you need to know to write a compelling hardship letter. Knowing what to write and what not to write are equally important be sure to read part 1 - "How To Write A Compelling Hardship Letter" part 2 - "What Your Lender Really Wants to Hear" and Part 3 - "What You Should NEVER Tell Your Lender." For more information on mortgage modifications, short sales and writing a foreclosure hardship letter check out my popular FREE special report "How To Write A Killer Hardship Letter" available on my website.



Rule #1 - Stick with the truth. You do not need to embellish your story to make it better (or worse as the case may be.) A common misconception is that your story needs to be complicated to be believable. This is NOT true. Simple is better whenever possible.

What Caused You To Get Behind?

It is very important to be able to figure out if this is a short term problem or a long term issue. If it is short term then you have a great chance at resolution. If it is a long term issue then you must make some changes to get back on track.

Can You Afford The Mortgage Payment Now?

You need to look long and hard at this one. Many people think they can afford the mortgage but never take a close look at their budget to see what it says. Create a monthly budget... look at your income vs. your expenses. Is your income for the month larger than your expenses? If "yes", then we are going in the right direction. If not, you need to look at what expenses you can cut or what income you can gain.

The bottom line is that if you intend to keep your home no lender is going to give you another chance if you can't afford the payment.

Do You Have A Qualified Hardship?

A hardship situation is generally defined as a situation beyond your immediate control that results in the default of your mortgage and may ultimately lead to foreclosure. It all boils down to "a change" which has left you with either less income or more expenses. You must prove to your lender that you have a "qualified hardship."

The truth is that there are only two qualified hardships!

#1 A sudden and unavoidable loss of income

#2 A sudden and unavoidable increase in expenses

Types Of Hardships.

Here's a list of "hardships" that are common and frequently accepted by Banks and Mortgage Lenders.

Sudden and unexpected change in income

- -Unemployment

- -Reduced Income

- -Loss Of A Job

- -Cut In Pay

- -Cut In Hours Worked

- -Forced Job Relocation By Employer

- -Forced Retirement

- -Divorce

- -Separation

Sudden and unexpected increase in expenses

- -Adjustment in the mortgage payment

- -Illness

- -Care For A Parent / Sibling / Child

- -Injury or illness in the extended family

- -Medical Bills

- -Medical Expenses

- -Disability

- -Death Of A Spouse

- -Death Of A Family Member

- -Accident (both expenses and loss of income)

- -Too Much Debt

- -High Utility Bills

- -Payment Increase

- -Business Failure

- -Automotive Repair

- -Damage To Property

- -Storm Damage / Repair

- -Military Service

- -Incarceration

- -Unforeseen Increase in Living Expenses

How Long Will Your Hardship Last?

The duration of your hardship(s) can be categorized as temporary or permanent. A temporary hardship may be a job loss (temporary layoff), illness, high utility bills, medical bills, and temporary disability.

A permanent hardship might include the death of a primary mortgagor, divorce, retirement, permanent loss of spouse's income. In the cases of a permanent hardship, the preferred alternative is to sell the property unless of course you have enough income available to make the mortgage payment.

The key here is "temporary hardship." You need to have overcome the financial aspect of your hardship in order to effectively get back on track through a payment plan or other solution.

WARNING - Be Prepared To Back It Up

It is certainly OK to mention unexpected expenses that have arisen lately like repairs and medical bills. Keep in mind that you may be asked to supply proof like the repair invoice or medical bills (or cancelled checks), showing that these expenses were both incurred and paid.

* * * If you have incurred bills but not paid them they have not contributed to your hardship.

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"

"Get Your Automatic Mortgage Rate Reduction"