You need a hardship letter to stop foreclosure because the bank needs an explanation as to why you fell behind on your payments. They also use this information to determine if your reason is a legitimate one and if you can qualify for a loan modification.

The bank also requires that you give them all of your financial information such as recent banks statements and paystubs.  These documents inform the bank how much you are currently able to afford. They will then determine if it would be in their better interest to continue with the foreclosure and try to sell it, or to allow you to remain in the home.

write hardship letter

When writing a hardship letter to stop foreclosure you need to include the following:

1)      What caused you to fall behind

For example did you have death in the family, lose your job or get a divorce.

2)      What your future plan is

Let them know how you intend to catch up and inform them that you can afford to pay if the payments were at least x amount of dollars lower (x being the amount you need taken off).

3)      List all necessary repairs

You may want to add a couple of things that is wrong with the home. This will sought of put the idea in their heads that the home needs repairs and therefore will not be such an easy sell. That way they would rather let you stay in it then to try to sell it themselves.

Make sure when you write your hardship letter to stop foreclosure that you make the letter as personal and sincere as possible.

Years ago it was a little harder to influence the banks to not foreclose when you got behind, but in today’s terrible economy and with these millions of foreclosures on the bank’s books, they now take any kind of explanation and usually decide in your favor.

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Filed under: Foreclosures

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