Writing an Effective Loan Modification Letter Will Make Your Hopes a Reality
An effective loan modification letter that accurately describes your current hardship with just enough personal touch and emotion to make it real is the key to being accepted for a loan modification. Like any refinance, new loan or mortgage, the process to approval is lengthy. With one out of every 200 homes in the US on the brink of foreclosure, loan modifications are the new salve for the blistered banking industry.
While all of your numbers, financial statements, credit scores and total debt will play a big part in the approval process, the most important part of the loan modification process is your hardship letter. It is your one chance to paint a picture to your bank that accurately shows the specifics of your personal situation. You want to get this right.
Your first step in writing an effective letter is getting all of your factual information together and writing it down chronologically. Looking at tax returns, check book ledgers, old bill statements and your credit report will give you all of the information you need. Start with when things were going ok and make a chronology of the events that lead to your current financial situation. Once you have painted the factual picture it is time to color it with those personal touches.
You do not want a sob story, you do not want drama, and you do not want to appear to be unstable. You want the bank to relate to you on a personal level without losing credibility as a borrower. So you tell your story through facts that you color with emotion. You talk about only the relevant experiences, the ones that directly contributed to your current financial situation. Once you have created that portrait you talk about your future.
You want the letter to end on a positive and forceful note. You want the bank to see that you have a plan in motion that will keep you in your home and at the same time making headway toward stabilizing your personal financial picture. Keeping your home should be your first priority. Being a responsible borrower with a solid and realistic plan to make that happen will help you to get approval from your bank.
Once you have a letter that you think is good, have a couple of different people read it. You may need to tweak it a bit to make it right. Having a knowledgeable professional on your side who can advise you will make a big difference in the outcome of your application. With the right guidance all of your loan modification hopes and dreams will come true.
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