Financial Hardship

How is a Financial Hardship determined?

A hardship determination is made to ascertain whether you have had a change in circumstances that caused financial problems.  Banks want to see certain “kinds of hardships”. Common financial hardships include: illness of a borrower or family member, loss of hours or employment of the borrower or a family member, failed business or reduced income, divorce or marital separation, medical bills or other unseen financial obligations, death of a borrower, co-borrower or family member, or seasonal income fluctuations. These hardships are normally explained as a part of a Modification Application in the form of a Hardship Letter.

How to Write the Best Hardship Letter

A good Hardship Letter should not paint too bleak a picture.  It should be a brief story with a bad past and newly improved circumstances.  A temporary bad circumstance that’s now permanently better is the best presentation in a Hardship Letter.

No good hardship letter should paint too bleak a picture.  It should be a brief story with a bad past and newly improved circumstances.  A temporary bad circumstance that’s now permanently better is the best presentation in a hardship letter.

  • Banks mostly like to see certain forms of hardship. The best form of hardship is one that is/was temporary and whose solution can be documented.
  • It is important that a hardship be presented as solvable and not permanent or impossible to overcome. Banks respond best to financial solvable hardships and not personal disasters.
  • Many financial hardships occur to financial contributors to the household and not the borrower or co-borrower. It is imperative to properly explain and document hardship requests that involve multiple sources of household income, including seasonal downturns in household income.

 

CALCULATING AND DOCUMENTING THE PERFECT MORTGAGE MODIFICATION REQUEST

While a bad hardship letter can cause a Modification Application to be denied, a great hardship letter won’t assure a successful Modification approval.

As experienced home saving attorneys, we know: it’s all about perfect math, hitting the proper income ratios and fully documenting those numbers.  Regardless of any hardship letter, too little income won’t work and too much income won’t work either.  You’re either too broke to be modified or too wealthy to be granted a Modification.  Perfect numbers and ratios substantiated by perfect documentation is the key to a successful Mortgage Modification Application.

With over 35 years’ experience, we understand the income to payment ratios Banks want to see, and the documentation they require to prove those ratios.  We understand just how to thread the needle.  Perfect math and perfect preparation are the key elements to all our successful Mortgage Modification and Foreclosure Mediation solutions.

At the Law Offices of Neil Crane, LLC, we offer a free initial consultation. Please do not hesitate to call us today at 203-230-2233, or complete our online contact form to discuss your questions and concerns with an experienced attorney. When you call us, you will always speak to a live person, not a voicemail. We are here to listen to and assist you.