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Using a Hardship Letter to Stop Foreclosure

Foreclosure is not something that anyone really wants to face. Any company or lender that has a lien on your property can take action to foreclose in the event you stop making payments as agreed upon in the contract you signed. This does not mean however that if you skip out on one payment that you are suddenly going to lose your home. You have to miss several payments in a row without anything set in place to bring the account you have current.

When a foreclosure is completed, you will have to leave the property and you will no longer have any ownership rights to the home or the land that it sits on. If you continue to come back to the house that was officially foreclosed on, you would then be considered a trespasser and charges could be pressed. In many cases, people find that they still owe the lender money even after their home has been taken from them and sold at auction. All in all, this is not a favorable situation for anyone.

It's A Process

It is important to remember that foreclosure is a process. Most people get scared at the first word spoken by a collection department about foreclosure. You must remember that the word is sometimes thrown around in order to scare you into making payments. Generally though, it is not that people are deciding not to pay their mortgage payments, it is just that they are unable to.

Most of the time, and there are exceptions, mortgage companies will not begin foreclosure action until the payments are more then three months past due. Once the foreclosure notification letter comes in the mail, the count down begins. Exactly how long you have to stay in the home will vary depending on the state you are in. Each state has different laws which means the foreclosure process could take anywhere from two months to two years. Either way, this means that you have some time to take action to save your home. The best thing you can do is to put together a letter of hardship to submit to your mortgage company.

What Is A Hardship Letter

A hardship letter is a letter written by the homeowner, explaining in detail what it was that caused him or her to fall behind on the mortgage payments. If the explanation is simply that there was too much shopping taking place then you will probably not get a lot of help. But if there was a death in the family, loss of employment, or major home repairs that were out of your control, there may be help that the mortgage company would be willing to offer.

By putting together a letter of hardship and sending it to the appropriate department within your mortgage company, you may find that you can get the help you need to be pulled from the foreclosure process and to have your account be brought back up to date. Depending on the company, there could be loan modifications, repayment plans, and forbearance plans that could help you in your time of need.

Help With Writing The Letter

Many people simply do not know what to do when they write their letter of hardship. The best piece of advice anyone could receive would be to make it from your heart. You want to include facts and you do not want to lie in case the mortgage company asks for further proof, but you want to try to pull some heartstrings. In the letter, you want to make sure that you are clearly explaining what it was that happened and how you are now in a position to afford making your monthly payments on time.

There are some templates on the web that can be used but it is not needed if you do not want to use them. Some letters could be professional looking with headers and such while others could look more like a hand written note to a friend. Both letters could get approved. There is no clear-cut, black and white way to write a letter of hardship. The most important part of the process is to simply provide the mortgage company with all of the financial documents and proof of income that they ask for.

What To Expect From The Process

It is important to make sure that you are keeping in communication with the department handling your letter of hardship. Depending on the exact outcome that you are looking for, or type of program, you could be looking at a couple weeks to a couple of months for the assistance to be granted and completed. This is why it is so important to make sure that you are looking into your options as soon as you realize that you are in trouble and heading towards a foreclosure.

In summary, it is important to make sure that you are communicating with your lenders all the time, especially when you receive notice that a foreclosure may be pending. Ask for options and assistance that may be available to you and begin to write the letter of hardship. No matter which option you go with, more in likely you are going to need that completed letter in order to have any chance of being approved for assistance. As long as you are proactive and have sufficient income to support monthly payments, you should have no problem getting your house payments back on track.