Does This Hardship Letter Seem Adequate?

jwa81

LoanSafe Member
Jun 23, 2014
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I'm in the process of submitting our request for mortgage assistance to Carrington Mortgage. I just wrote a letter of hardship and I wanted to make sure that this is what they'll be looking for before I fax it off to them. I did one of these over 2 years ago when we got our first modification when we were with Bank of America, but it's been a while, so I'm a little rusty and I want to be sure that I have all of my ducks in a row when sending them this package. Any advice/tips would be greatly appreciated!

October 8, 2014


To Whom It May Concern:


I am writing this letter to explain our unfortunate set of circumstances that caused my husband and I to fall behind on our mortgage payments. We have done absolutely everything in our power to attempt to get caught up on our payments , but we are in need of some assistance and we would be greatly appreciative if you would work with us in either modifying our loan or coming up with some sort of a repayment plan that will allow us to bring our account current. We have every intention of keeping our home as our normal monthly payment is completely affordable for us and we are more than capable of making our payments, but it’s the past due amount that we need assistance with.


These are the sole reasons that caused us to fall behind in our payments. At the end of February/beginning of March, my husband became seriously injured, causing him to be out of work for approximately 4 months. He required two surgeries and extensive physical therapy and was unable to return to work until the middle of June, so we were without his income that entire time. Also, during the time that he was temporarily out of work, my income was significantly less than what it is now due to changes at my job that had a very negative impact on my income. Fortunately, in early May, I obtained a job at a new company and I am now earning more than twice the amount that I was earning at the previous company I was working for. I have not changed careers, only companies. I have been working in the same field for over 10 years now.


Unfortunately, by the time I obtained my new, higher paying job and by the time my husband was finally able to return to work after recovering from his injury and surgeries, we had already fallen significantly behind in essentially all of our bills, mortgage included. Because our financial situation has greatly improved, we are now more than capable of making our payments; however, we are requesting some assistance in coming up with a way to take care of the past due payments in the form of either a loan modification or some sort of a repayment plan that will allow us to bring our account current again.


We greatly appreciate your time and any assistance that you can provide.


Sincerely,
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,850
466
1,000
49
Southern California
www.loansafe.org
Hello,

I think it is GREAT! Not too long, and not too short, but says everything they want to hear. I give it a big thumbs up.
 

jwa81

LoanSafe Member
Jun 23, 2014
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Thanks! I just finished faxing everything off for them to review and my point of contact at Carrington said that she will keep a close eye out for it and will let me know once they receive it. I didn't want the letter to be wordy, but I did want to be thorough and fully explain the situation that caused us to fall behind in the first place. Now we just wait. Fingers crossed that we have better luck with Carrington than we did with Bank of America! We did get a modification back in 2012 with BOA and our interest rate is currently 3.75%, but hopefully we can get something! We don't even care about getting a lower payment at this point. The amount that it is now is totally fine and affordable for us. Plus, our payment is going to be going down by about $75 next month anyway because of a decrease in our property taxes, and that will mean our mortgage payment will be under $1000 a month for the first time ever, which will be awesome. Right now, we just need help doing something about the 5 payments we are past due, so hopefully they will work with us and be able to come up with something!
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,850
466
1,000
49
Southern California
www.loansafe.org
It is my pleasure. I hear you...

I think there is a good possibility you can get help. Over the years, I have seen similar situations like yours where they gave the person a loan modification by just tacking on the late payments to the mortgage balance and kept the rate the same.

Keep thinking positive and stay on top of this and I personally think you will be successful. But it will just take some time and even a few stressful movements.

I look forward to hearing more of your story as your continue your plight. Remember that is why LoanSafe is here, so you call can vent, share and ask questions in an anonymous environment. Anytime you need help, just start a new thread or ask on an old one like you have been doing.

Peace!
 

jwa81

LoanSafe Member
Jun 23, 2014
103
20
18
38
Wow, I didn't know they could just tack the late payments onto the end of the loan without modifying it! The only thing that worries me is that we have a USDA loan and they have VERY strict guidelines when it comes to mortgage assistance, so I don't know if that's something they would be able to do in our case or not. I almost doubt it. I just hope they can come up with at least something that will work for us. We absolutely can make payments, but we need them to work with us!
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,850
466
1,000
49
Southern California
www.loansafe.org
Actually, that would be a loan modification because they are modifying your mortgage balance. The repayment plan you were on you had defaulted so now this is the last bet.

This is from the Making Home Affordable website:

FHA, VA and USDA all offer programs for rural homeowners to lower their monthly mortgage payment to no more than 31 percent of their verified monthly gross (pre-tax) income — making monthly mortgage payments more affordable. If you have a loan that is guaranteed by the United States Department of Agriculture's (USDA) Section 502 Single Family Housing Guaranteed Loan Program, you may be eligible for a program through that government agency.

Here is a PDF that gives more information on modifying a USDA loan: https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/lossclaim/RD Special Loan Servicing Job Aid.pdf

The Lender must consider the following traditional servicing options before considering special loan servicing: a repayment agreement, a special forbearance agreement, and a loan modification plan with a term not to exceed 30 years from the date of the original loan. Then
the Lender may consider an extended-term loan modification. If the targeted mortgage payment to income ratio cannot be achieved using an extended-term loan modification, then the Lender may consider a mortgage recovery advance in addition to the extended-term loan modification.

Before considering a mortgage recovery advance, the Lender must reduce the interest rate to the maximum allowable interest rate and extend the repayment term for 30 years from the date of loan modification. The Lender may reduce the interest rate further and/or extend the term of the loan for up to 40 years from the date of loan modification at the Lender's option, but the Lender shall not be required to do so before utilizing a mortgage recovery advance. This will afford Lenders the flexibility to adhere to specific investor loan modification term extension
requirements.​