Writing a hardship letter for deed in lieu of foreclosure

A hardship letter explains the circumstances that caused you to fall behind on your mortgage payments. Financial hardship is typically a loss of income or major expenses that were unexpected or beyond your control.

As you know, time is of the essence so please contact me as soon as possible to confirm your approval or let us know if you need any additional information for the confirmation of our request.

Examples of Hardship Letters for Deed in Lieu of Foreclosure

Lee Legal routinely represents clients facing foreclosure. A few key points in your letter will help the lender determine whether foreclosure is imminent and a deed-in-lieu is the right option. Do this by providing the lender with your plan to get back on track with your payments, and show writing a hardship letter for deed in lieu of foreclosure lender that you will be able to continue to make your modified monthly payments.

Examples of valid hardships include: A financial hardship letter should explain to your lender why you are in financial distress and your capacity to resolve it.

The fourth paragraph reiterates your request for loss mitigation and invites the company to contact you should they need more information.

How to Write a Financial Hardship Letter

Things to Note Regarding Loan Modifications The importance of the hardship letter varies some depending on what type of loss mitigation you are seeking. Before contacting the bank with your foreclosure plans, get as much documentation as possible to show the bank that you have an Underwater Mortgage.

Click the image for a PDF version. This option — including agreement to waive any resulting deficiency balance — allows us to work together and get on with our lives while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain. If you fall behind on your mortgage, you will have to submit a lost mitigation package to avoid foreclosure.

Nobody wants to be in a situation of hardship. Looking for help with a troubled mortgage or foreclosure? For home owners that are facing foreclosure, a deed in lieu of foreclosure provides an alternative solution for people suffering a hardship. In certain situations, a borrower may pay to reduce the debt to ensure they maintain their credit rating.

Loan Modification, Short Sale. Also, clearly state that you are requesting a deed in lieu of foreclosure as a result. Under this program, a borrower who is eligible for a deed in lieu and who indicates an interest in remaining in the property as a tenant following the deed in lieu may lease it from Fannie Mae for 12 months at market rate.

See how the recent Nationwide Foreclosure Settlement impacts your own foreclosure. A deed-in-lieu is usually a last resort, and you must exhaust the alternatives, such as a loan modification or a short sale, in which you sell your home for less than the mortgage owed.

The lender wants to hear the facts, and you should try to present those facts on a single page. We are the borrowers on the above-referenced loan. You will need to demonstrate that if the loan is modified, payments will continue uninterrupted.

Just state the facts that are relevant to making your case. The second paragraph describes the actual hardship that you faced, whether job loss, benefits expiration, illness, divorce, death of a spouse, or expiration of the teaser rate on your adjustable rate mortgage ARM.

For example, Washington has explicit case law that states a loan holder may not obtain a deficiency judgment after a deed in lieu, even if the consideration is less than a full discharge of the debt.

Writing a Hardship Letter as Part of Your Foreclosure Defense

The recent housing market challenges have reflected a coalescence of these factors, which have made deeds-in-lieu a common instrument for borrowers facing foreclosure. That is, explain to the lender how you got into the situation and why it was out of your control.

Multiple Liens Can Complicate Things A lender is less likely to approve a deed in lieu of foreclosure if your home has several liens other than the mortgage.

Next, describe the hardship in more detail. You should make any changes that more accurately reflect your situation or use language you feel more comfortable with. A good foreclosure defense law firm will have staff members that can assist you.

There is a fine line to walk when composing a hardship letter for a loan modification. Share on Facebook A deed in lieu of foreclosure deed in lieu is a loss mitigation option, along with short salesloan modifications, and forbearances, which may be available to borrowers who are in financial distress and facing foreclosure.

Be realistic in this and do not make promises that you are not sure you will be able to keep. In order for the agreement to be reached, the appraised market value of the property must be less than the outstanding debt from the original agreement, and the property must not be subject to any third party creditor claims or liens.

The short answer — You just give the property to the bank and walk away to become square with the bank.A deed in lieu of foreclosure hardship letter is necessary if you cannot find a buyer for your house and you want to give its keys to the lender.

The Deed in Lieu of Foreclosure Hardship Letter is required by the bank before they’ll consider your request to convey your home back to them and is the one opportunity you get to explain your situation in personal terms.

Deed in Lieu Hardship Letter. We have tips on writing hardship letters as well as hardship letter templates. Sample Hardship Letters. Hardship Letter for Deed in Lieu of Foreclosure; Hardship Letter for Short Sale; Hardship Letter for Rental Property; Hardship Letter for Loan Modification.

Sample Hardship Letter: For home owners that are facing foreclosure, a deed in lieu of foreclosure provides an alternative solution for people suffering a hardship. In particular, the deed grants the lender, full rights to the property title to satisfy the conditions of the loan.

Such agreements are a common form of mortgage contract settlements. A financial hardship letter should explain to your lender why you are in financial distress and your capacity to resolve it.

There are different reasons for writing a hardship letter, but the most common these days are for the purposes of requesting a loan modification or short sale to avoid foreclosure.

Sample Hardship Letters

This article addresses how to write a financial hardship letter for loss mitigation, whether you’re seeking a modification, deed-in-lieu of foreclosure, or short sale.

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Writing a hardship letter for deed in lieu of foreclosure
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