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Hardship letter: What is it and how to write it?

My mortgage is with Chase and I have ask for a loan mdification. I have to submitt a hardship letter and I need help writing it. I can not afford the payment as it is because of health problems. My income is much lower now and I am on disability. I can't [url=http://www.mortgagefit.com/refinance.html]refinance[/url] because I don't qualify. I am not currently latebut I don't know if I can make March's payment. They told me to continue to "make the payments" and that this could take up to 90 days. I don't know how I am going to make the payments and I don't want to be late. What do I need to include to make sure this letter gets me the rate reduction that I need?

kpatrick's picture
kpatrick | Joined: October 29, 2007 05:46 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Vickie,

Welcome to the forum!

A hardship letter is nothing more than you sitting down and elaborating on your situation, in detail. I know in the beginning, it may seem like a difficult thing to do, but just sit down and start typing the story, and after you get started, it isn't as difficult as you think. Here are some guidelines that you can use:

You must explain why you have gotten behind and why you cannot afford your payments. You must be very specific as to the dates of the Hardship.

Use this guide to give you some ideas...

The key with a hardship letter is to be very detailed in the fact that you have tried everything you know to do...the challenge is, most lenders will not make adjustments to the mortgage if you aren't already behind in the payments. I know this sounds strange, but it is just how it is.

I hope this helps, and good luck to you!

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for the reply. I have submitted my letter along with tax returns pay stubs, bank statements and a budget. I have not yet missed a payment but I do not have the money to make the next one due. Will they wait until things get that bad before they help? Do they charge a fee to do this?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Vickiesmith,

Welcome back.

It's good that you've submitted the letter. The sooner you do so, the better. Well, I really don't know whether they will wait; this will totally depend upon the lender and I suppose he'll charge a fee if he's doing a loan modification. How long is it before the lender is likely to respond back to you?

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm not sure, theperson that took my request for the modification said it would take 60 to 90 days and for me to continue making the payment which I can't. I have no income as I have been dignosed with a rare blood disorder in which there is no cure and prevents me from working. We are having to live off of my husbands income which is a big change for us. I hope they will let me keep my house. If they modify it to a 5-6%interest rate we could afford it.

Thanks

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i think you need to kick your request up a notch, vickie. it seems that the individual you have been dealing with so far has failed to grasp the critical nature of your situation.

do not wait for them to contact you....can i say that again? DO NOT WAIT FOR THEM TO CONTACT YOU. okay...i will relax now.

you need to persuade them, cajole them, convince them that this is a very critical situation and that waiting 60-90 days is not an option for you. perhaps you need someone to assist you in this endeavor. do you have legal counsel who can act on your behalf?

no matter what, please try to contact a supervisor of the person with whom you have been speaking so that you can impress upon that person the immediacy.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks George,

If I don't hear anything today, I will do just that. This stress is almost unbearable. I don't have legal or other counsel, no money for that. Do you think I should contact HOPE? Could they get the ball roling faster?

Thanks
Vickie

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

by all means, contact HOPE. you need to contact anyone who can help you, frankly.

leave no stone unturned.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I agree with George, you should contact them again and stress the urgency of your situation. I submitted my hardship letter and request for loan modification on Feb. 11 and was told that it should take 2weeks to get an answer. I made it a point to let them know that I will not be able to make the March payment as it is right now, so the sooner they can assist me in some kind of way, the better we all will be as I know that they want something for March and so on. Good luck!

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Modifications typically aren't something that's done right away, unfortunatley there are literally thousands of people asking for the same thing (loan mods). Workout Departments are over whelmed and understaffed, so they have to prioritize work and normally houses facing a foreclosure sale date are going to take priority first. The mortgage industry is hurting too and having financial problems so they can't hire more staff to help.

Just try and be patient, at best it's going to be a 6 week process in all likliehood

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

keep in mind a modification in most cases won't lower the current payment you are on. If you have an ARM loan, the rate will just reset to the original rate before the adjustment.....if you have a fixed rate most investors won't allow you to lower the rate any lower than the initial rate...if you are delinquent all a mod is going to do is put your delinquent balance into the principal which will actually raise your payment..

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Matt -
Different lenders must have different stipulations and offerings when it comes to loan modification. I'm with Countrywide and have been initially approved for a loan modification through their Home Retention department. They said I qualify for a rate reduction on both my first and second, which would inevitably decrease my monthly. I guess it all depends on your situation and your lender.

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helping_user's picture
helping_user | Joined: March 31, 2006 03:39 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

yeah Shemiah, it actually depends upon the lender and your situation as to whether you will be able to get a rate reduction or a loan modification.

Matt, is it true that modification doesn't lower payments? because it is done to give some relief to borrowers and actually help them pay off the loan instead of being delinquent.

Thanks.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for all the response. Does anyone have any experience with Chase? I just got off the phone with them and they said that It will take 30-45-60 to 90 days and that I still have to make March payment. I ask about deffering that payment and was told that they do not offer a forbearence program. If the rate is not reduced and my payment lowered, i will go into forclosure.
Shemiah- can you (IN GERERAL) share with me what your hardship letter said?
George/all How do I get in touch with HOPE? I live in North Carolina.
Thanks to all
Vickie

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Vickie,
Below is the my letter (although I've removed some of the more personal info).

This letter is a request for a rate reduction for loans XX for my home located at XX.

Unfortunately, I have experienced several events that have drastically altered my financial situation to the point where I can no longer afford this home. THIS IS WHERE I GO INTO DETAIL OF MY FINANICAL SITUATION. As of now, I can no longer afford this residence and will soon fall behind on my payments if my monthly payment is not reduced to an amount that I can afford.

As you will see, I have never once been late on my payments because I value my credit, my home and the commitment I made when I entered into this agreement. I have also managed to maintain an excellent credit rating; however, I fear that if I do not receive any type of assistance soon for my situation then the aforementioned will be a thing of the past.

HERE I TALKED ABOUT PUTTING MY HOUSE ON THE MARKET, BUT I MADE A POINT TO HIGHLIGHT THE SEVERITY OF THE MARKET AND THAT SIMILAR TOWNHOMES HAVE BEEN SITING ON THE MARKET FOR MONTHS WITH CONTINUAL PRICE REDUCTIONS AND STILL NO OFFERS. AND I WOULD HOPE THAT IF IT GOT TO THIS POINT, THE LENDER WOULD RECOGNIZE THE CURRENT STATE OF THE MARKET AND APPROVE A SHORT SALE.

HERE I INCLUDE WHOM I SPOKE WITH AT THE BANK AND WHAT THEY HAVE ADVISED ME TO DO.

I hope that LENDER'S NAME will review this request with understanding and a willingness to help a faithful borrower whose situation has changed beyond her control. I thank you for reviewing my request and I look forward to hearing from someone soon.

Sincerely,

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Vickie,

Being a North Carolinian, you can contact HOPE Hotline toll-free at 888-995-HOPE .

Thanks

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vickiesmith54's picture
vickiesmith54 | Joined: February 12, 2008 10:42 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks to everyone who has helped me with this. I will try to keep updates as to what is happening in hopes that this will help someone else as well.

Thanks again

Vickie

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes it is true that a loan modification does not always lower your payment..most investors will not allow a rate reduction on a loan that is already a fixed rate.....if you are 4 months late on your mortgage and you have a fixed rate your payment will go up because the 4 months are being put back on your principle and it is capitalized over the remaining term of the note thus raising your principle balance and raising your payment..

If you are current and simply asking for relief from your ARM then no your payment won't go up your interest rate will likely just be rest for 5 years to the original rate....if you are delinquent AND you have an ARM your rate might get rest but because of the delinquency and depending on how delinquent you are your payment still may go up also..

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larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Matt,

Welcome to the forum.

Good suggestions Matt. You seem knowledgeable. Are you a lender or a broker?

Why don't you join this community? You can help people and at the same time can earn some $$$ and also make friends from all over the world.

You can introduce yourself at http://www.mortgagefit.com/introduce-yourself-5.html and let your self know to the world.

Feel free to ask if you have any further questions.

Thanks,
Larry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Not a lender or a broker, just someone who does workouts for a mortgage company for a living..just hoping to educate a few people along the way!

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Matt,

You mean you're into negotiating with mortgage companies to help borrowers with some work out options? Isn't that similar to a foreclosure help company? I've heard most of these companies are frauds, is that so? You seem to be giving some great advice here. Not a problem if you aren't a lender or broker, you can still join this community and get rewards as other have. Just have a look at http://www.mortgagefit.com/annoucements/community-rewardsdollar.html .

Even i joined with the aim to help others..i was looking for such communities to help people whenever I had time from my regular work and i stumbled across this forums one day and what a great community it is! I like the people here as they genuinely want to help others and you too seem to have similar thoughts. Well, that's great 8)

Hope to see you soon as a community member. :)

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

No I work for a workout department for a mortgage company. I'd perfer to remain annonymous however. :)

As for Foreclosure assistance companies, I wouldn't go as far as to call them frauds because many have genuine intentions of helping homeowners, however from the borrower perspective those companies can not do anything you can't do yourself, so why spend the money? The money you spend on getting one of those Foreclosure Assistance companies to help you is money you could put on your delinquent mortgage!
The best rule of thumb is to work with your creditor and negotiate directly with them in most instances.

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larry2's picture
larry2 | Joined: June 27, 2007 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Matt,

I think the main moto here is to help people if we can. So if you can help people with your sound info and valuable suggestions there is nothing better then that :)

Best of luck,
Larry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hello, I am currently deliquent in my loan by two months. I have decided to try an do a Short sale or a [url=http://www.mortgagefit.com/deed-lieu.html]Deed in Lieu of foreclosure[/url]. :? I have not loss employment just simply switched job which in the future will be more pay. Also I had my daughter has a renter. Which allowed me to have no problems. She is moving out of town to college. So there went the extra income. I am attempting to get a second job. Next questions: Now bad does a short sell or Deed in Lieu of Foreclosure effect your credit? 100 or more points?

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Jessica's picture
Jessica | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Well WendyC, a short sale or deed in lieu (dil) reduces your credit score by several points. To know how short sale/dil affects credit , refer to a previous community discussion on this topic.

Regards,

Jessica.

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cliff3's picture
cliff3 | Joined: May 5, 2008 02:15 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hello WendyC,

Your lender has other workout options that you may qualify for besides a short sale or Deed in Lieu. You need to be speaking to someone within the [url=http://www.mortgagefit.com/loss-mitigation.html]Loss Mitigation[/url] department of your lender. A loss of income may qualify you for a loan modification. Of course, this is with the assumption that you would like to have the option to try and keep your home.

Also please note that there are usually particular requirements for a Deed in Lieu:

Are you imminently facing foreclosure? Are you at least 31 days delinquent?
Have you exhausted all means to [url=http://www.mortgagefit.com/foreclosure/17ways-avoid.html]avoid foreclosure[/url]?
You, the borrower, must voluntarily submit a written offer of the Deed in Lieu and it must specifically state that the offer to enter these negotiations is being made voluntarily. You must list all the conditions for which the DIL will be accepted. Including the agreed upon transfer date of the property. On that date, the property must be vacant and clear of all your personal property.
Usually the lender requires that you have listed your home with a Realtor for at least 30 days. They need to see that you have attempted to sell the property, but that you have been unable to sell the property. They prefer for there to be no other liens against the property at all.
The property should still be occupied, unless you provide documentation that can verify your need to vacate the property, i.e. loss of income, increased living expenses.
The property is not a rental investment, nor used as a rental for more than 12 months.

Keep in mind, that neither you nor the lender is obligated to proceed with the DIL unless a final agreement is reached. The lender is not required to accept the Deed in Lieu.

Please let us know if you still have questions.

Good luck. :)

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jmiller's picture
jmiller | Joined: September 4, 2008 09:39 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Our group of attorneys will help expedite this process for you. The Lenders tend to listen better when you have legal representation. You have started the process which is good. Why not have an attorney negotiate every aspect of your loan. Maybe they will forgive some of the balance due in the process. You will get either a 2-5 year fix interest only payment or a 30yr fix payment. Whatever will give you the lowest and most beneficial payment that you can afford. With your current financial situation, what payment can you afford?

J. Miller
Wholesale Financial
16661 Ventura Blvd.
Encino, CA 91436
(818) 789-3998 ext.301

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I need a lower payment and interest rate on my home. The lender promised to [url=http://www.mortgagefit.com/refinance.html]refinance[/url] me in 6 months which this did not happen. Now I am stuck with a payment that is becoming too much to pay. I am about to fall behind. Do you have any suggestions how I should proceed.

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Renee!

You can contact the lender and ask why he is not ready to refinance the loan? Normally the lenders agree to refinance a loan when it is 7-10 months old. I think that is causing the problem in your case. You can go in for a loan modification if you fall behind on payments. I think that will help you.

Thanks.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I need to write a hardship letter do not know where to start my house has a offer of 45 less then what I payed I can not afford all the personal bills and the mortgage to I am overextended on all my credit cards and have exhusted all f my savings

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi paulined!

I can understand your situation. In the hardship letter you should provide the reasons for not paying the debts. Along with the sample hardship letter, the lender will also ask you to submit pay stubs, tax records and other financial statements.

Thanks.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I was successful in getting my first mtg. modified, and have been paying it religiously. The balance is $223; house value is $190-200k. I have a second mtg. w/a balance of $25k, and an interest rate of 14%. I have tried on four occasions to get it modified, and have been turned down each time for completely contradictory reasons. I am on a fixed, disability income - first, I was told to get my first modified; 2, I didn't make enough; 3. I made too much. The last time, I was told that the second would buy the first ($223), then foreclose on me for both the first and the second.

I give up. My credit is ruined (I'm 2 months behind on the 2nd); I have lost $60k in equity, and no foreclosure is going to realize enough from a sale to cover their balances. I'm considering just giving a DIL to both; I'm over 60, will never buy another home, and couldn't maintain it if I did. Any suggestions? The second is very busy threatening vs. giving viable options.

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi pamt,

DIL will be good option for you. In this process, the lender will sell your house and try to recover his debts. In case, if there is a deficiency, there are chances that the lender will forgive it. To know more about deed in lieu, have a look at the given link:
http://www.mortgagefit.com/deed-lieu.html

You have mentioned that the lender has given you contradictory reasons for not doing a loan modification. I think you can even take the advice of a mortgage attorney and see what can be done.

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My mother is 71 yrs olf and has been handicapped in a electric wc for the last 18 yrs ,she fell in water from a overflowed toilet in the br of her office complex and had a spinal fusion gone bad that left her handicapped. She has been able to live a independent life and lives in a one br condo(convertted from an apt complex) for the last 4 years. Recently she has started to deteriorate health wise, she has had numerous bouts of pnemonia and has been placed on oxygen 24/7. We as a family along with her(she mentally remains sharp as a tack!) have decided she needs to be in an independent living/assisted living enviroment , but her monthly income from SS and her annuity(set up after her injury) is $2600 a month and the assist lvg is $2100 a month,her medication are at times $400 a month...........Ok now for my question we are looking into dlf as an option instead of foreclosure but we want to make sure the mtg co cannot take her annuity or ss income (which are her only income ) Also she has a modified van with a lift shat she clicks her wc in to go to Dr, groc ect we don't want them to try and take that too.How can we avoid this? She has not been late on pmts yet but we will be moving her to new place at the end of month so at that pt we will not be able to make pmts.Thanks and sorry this was so longwinded.....mindy

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Mindyloving daughter!

Have your deed in lieu foreclosure been accepted by the lender? Did you inform the lender about the whole issue through a hardship letter?

As far as I know, liens cannot be placed on the social security income or her annuity. Moreover, as its a deed in lieu foreclosure, the lender will normally forgive the deficiency.

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We have not even sent a hardship letter yet as we are just moving her out next wkend and she has not been late on any pmts yet , but because she will be in the asst lvg in dec we will not be able make any more pmts on condo. We were also told that the mtg co will not even talk to us about until she is deliquent on the mtg. Thanks Mindy

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Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Mindyloving daughter!

Yes, it is correct that the lender will not generally speak about a loan modification or any other plan until they default on payments. However, you may try speaking to them as sometimes they may consider certain situations. You will have to explain her situation to the lender properly and I hope they will agree.

Thanks.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My husband and I just wrote a hardship letter to CHASE and within one week we recevied a response. We wrote everything we could. We followed all the guidelines and we were rejected. What do we do now? We haven't been late on a payment, but now we are about to be. I feel like we've tried everything. Any suggestions?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi mmdw,

Did you apply for a loan modification or a deed in lieu? Lenders do not offer the options of loan modification, short sale or a deed in lieu unless you have been delinquent on your payments. As you were not late on payments so the lender may have rejected the hardship letter. In my opinion, you should once again speak to the lender and inform them about the problem that you are facing. You should also tell them that you may get delinquent in the near future. May be they will help you.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We have our first with [b:84f0722977]CITIMORTGAGE[/b:84f0722977] and second with [b:84f0722977]CITIBANK[/b:84f0722977].....it has been a nightmare working with both companies trying to get loan modified or any help. CITIBANK will not even talk to you UNLESS you are currently delinquent. So for those of us making our payment but coming to a point where we won't be able to, there is no help. All their advertising is a joke!!

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

Yes, its correct that lenders won't help you with a short sale, loan modification or a deed in lieu if you are not delinquent on payments. However, you may try negotiating with them so that they are convinced that you are facing serious hardship. Thus, they may agree to give you a loan modification.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

will your lender still want to help modify your loan if you have already filed bankruptcy?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi flatbuttbroke!

Welcome to forums!

It will be totally the discretion of the lender to modify the loan. You will have to speak to the lender regarding loan modification and try to convince him.

Feel free to ask if you have further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can my mortgage co come after me legally after a foreclosure if I have already tried and failed to get my loan modified?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hey shalsha,

I did not understand your question completely. If your mortgage company has foreclosed the property, then they can definitely come after you for the deficient amount resulting from the sale of the property.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm two months behind on my mtg and am in [url=http://www.mortgagefit.com/loss-mitigation.html]loss mitigation[/url] I.e. loan modification. Next month I think I should be able to make my payment. Should I start back paying as usual while in mitigation?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi CDL,

As you have already applied for a loan modification, the lender will give you a new plan for repayment of your debts. So you will have to pay according to the new plan.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am trying to get a loan but the bank wants me to write a letter to the underwriter explaining why I had a tax lien. Please help

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome vina,

I would suggest you to contact an attorney who will help you in writing the letter and explaining the causes of tax lien to the lender.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We have two mortgages. Our first is with CitiMortgage with a balance of $161,048.00 at 5.25% and a 30 year fixed. We have a forebearance plan that we pay 1,582.00/month until August. Our second is with Countrywide with a balance $146,000.00 at 8.375% interest only 25 year ARM. We pay 1,020.00/month on this. I would estimate the value of our 987 sq.ft. home to be $200,000.00. We are trying to decide if we should keep struggling to make payments on a home we have outgrown and that will not come up in value for many years to come or try to do a short sale or go into foreclosure. We bring home $2,600.00 every two weeks after taxes and insurance. We think we make too much to qualify for a loan modification that would give us the incentive and ability to stay in our home.

Do you think our mortgage companies would lower our loan balances if we make $90,000/year? Do they look at what you bring home or gross income? Should we try to stay in home that is too small with three children and worth over $100,000.00 less than we owe to keep our credit. How long is our credit affected after having a foreclosure or short sale?
I appreciate any help you can be on this difficult financial and moral decision we have to make.

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rocky,

I can understand that you are going through a tough situation. However, you should note that the lender will not accept your request for a short sale until you are delinquent in your payments.

As far as foreclosure is concerned, I think that a short sale is a better option than foreclosure. A foreclosure will reduce your credit score by 250 points whereas a short sale will reduce your payments by 75-100 points. Moreover a foreclosure will also stay in your credit report for 7 years.

Mortgage companies cannot directly lower your mortgage balance. You can apply for a loan modification and check if you can qualify for it or not. This will help you in saving your property. However, if you can afford to lose the property, then you can go for a short sale or a deed in lieu.

Thanks

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