Often many times people ask about hardships and what exactly counts.  For the loan and mortgage industry it means that you are having financial difficulties paying your monthly mortgage payment.  This problem can be caused by a variety of circumstances and situations.  It is also important to remember that each lender is different and has their own policies so opportunities to find a solution to a problem will vary.

• Your payment jumped upwards(payment shock)
• Illness
• Reduced Income
• Death of a Spouse or co borrower
• Divorce
• Medical Bills
• Job Loss
• Failed Business
• Job Relocation
• Incarceration
• Military Duty
• And many other hardships that reduce your ability to make your monthly mortgage payment

The purpose of the letter is to notify the bank of a change in your financial situation that has or will cause you to be unable to pay your monthly mortgage payment.  The ultimate result will be to get a new loan under better terms or modify the existing one so the monthly payments are affordable.

Bad credit is also not necessary, many people with good credit who are in the situations listed above can qualify for a loan modification or short sale.  Another reason to apply is an upcoming recasting of a loan.  If you have an upcoming payment adjustment that will not be affordable monthly contact your lender ahead of time to start the process early.

This entry was posted on Tuesday, March 31st, 2009 at 4:53 pm and is filed under Loan Modification. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.