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, or if you are facing a recent or imminent increase in mortgage payments. 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.

  • 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.

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