When negotiating with your lender to reduce your monthly payment, mortgage rate, or principal balance, the most important leveraging tool at your disposal is the mortgage hardship letter. Without an effective hardship letter, your chances of loan modification success are reduced immeasurably.

There are three very important things to keep in mind when preparing to write your hardship letter:

1.Emotionally Effective
Remember, this letter is being read by a person just like you and me who may be facing similar economic hardship. That said, make sure your letter evokes emotion. If you have an Adjustable Rate Mortgage loan that ‘popped’ up on you and you are struggling to put food on the table for your children and recently out of work husband, stress that in your letter. Do your best to make the letter as emotionally effective as possible.

2.Honesty is the Best Policy
Don’t make up a dire strait scenario that simply does not exist. The lender will be checking your recent financial records to see if your hardship letter matches up with the nuts and bolts of your financial situation. Dishonesty will not be rewarded with a successful loan modification and your hardship letter should reflect accurately your current situation.

3.Put on the Lender’s Shoes

A. If you were lending to an individual in your shoes, would you offer another chance to keep their home? Ask yourself: Will they be able to meet the new loan terms? Is their financial situation permanent, or only temporary? Do they have a serious desire to remain in their home?

B. You must also think like a lender along other critical lines. Would you say that an individual who makes payments on a boat, a 4-wheeler, and his ‘toy hauler’ is truly facing economic hardship? Along those same lines, do you think that a family who is sending their son or daughter to college or private school is truly facing economic hardship? (The answer to both of these questions are, NO!) The mortgage lender does not believe that they should foot the bill for your child’s education or your hobbies.

Ok, now that we have a better idea of how to write a powerful hardship letter, it is also important to know that a loan modification company that negotiates on your behalf will help you write an effective, heart felt, honest, ‘lender minded’ letter. A good loan modification company will sit down with you and help you write your economic hardship letter FREE OF CHARGE.

You should never have to pay an attorney or independent individual to write your hardship letter. A good Loan Modifications company understands the financial needs of today’s American homeowner and will have no problem formulating a loan modification hardship letter with you.

For loan modification hardship letter sample, visit: Sample Hardship Letters.

If you or someone you know will benefit from a mortgage loan modification, visit www.LoanModUS.com for legal help.

What is a loan modification agreement?
Simply put, a loan modification agreement is one of the best options to foreclosure. A loan modification agreement is a legal instrument negotiated with your lender to prevent foreclosure and work out an affordable long-term solution. With a loan modification agreement, you are able to stay in your home and live under affordable terms. (Before getting started, always require these conditions when dealing with a loan modification company: 1. Attorney Backed 2. 100% Money Back Guarantee 3. Some Form of Online Tracking.)

1.)
Begin gathering your financial records.

These include (but are not limited to):

• bank accounts records (checking & savings)

• most recent tax record

• most recent pay stub

• receipts of major purchases

Your current financial picture will determine whether your lender will conduct a loan modification agreement. Based on the lenders assessment of your financial picture, your loan interest, principal, or terms of payment may be adjusted to a more affordable level.

Honesty is the best policy! If you are asking for a loan modification agreement because you are our of money due to unemployment, don’t hide any bank accounts, or extra source of income. Lenders may require that large withdrawals be properly explained and documented.

Show your ability to make payments under new mortgage terms. You need to have something to show your lender that you are financially able to pay the mortgage under the new negotiated terms. Items include, being employed, receiving monthly payment, or some cash in the bank. In applying for a loan modification agreement, if properly negotiated, lenders might reduce the amount charged for your deferred payments. This is easily negotiated with the help of a Law Firm backed Loan Modification Company.

2.)
Contact the “decision maker” regarding your request for a loan modification agreement at your lending institution. The unfortunate fact is, in most cases, you will be stopped at the gate and will be forced to speak with either collections officers or receptionists. Talking to them is fruitless, because they are not the true “decision makers” and can not help in the actual loan modification agreement. Simply trying to find the “decision maker” is a major hassle for an ordinary homeowner.

The aid of a loan modification company will vastly improve your odds for success. Lenders are more inclined to negotiate a loan modification agreement with an experienced company or individual that knows the ‘jargon’ and has the legal authority to back it up. The most important advantage of a loan modification company is their legal expertise and leverage by knowing who to speak to and how to present legal information. The loan modification level of of success is greatly enhanced with assistance of a law firm backed loan modification company.

3.)
Keep True to Your End of the Loan Modification Agreement

Once your loan modification agreement is properly negotiated and you have received a “clean slate”, maintain your monthly obligations to pay your mortgage. A loan modification agreement does not simply mean an extension of your stay before foreclosure! You now have a mortgage that you can afford, so take pride in maintaining the American dream of homeownership.

Loss mitigation is when an asset isn’t worth what was expected and then deciding how much loss is acceptable. If you have shares of stock or another investment that isn’t worth your original purchase price, then you have to decide how badly you want to keep it and what price you’d accept when selling. This is how banks have to look at every loan that doesn’t perform. They must decide to keep the terms, possibly foreclose, and lose the payments from it…or to forgive debt or make other concessions so that the loan works for the homeowner.

When negotiating with the lender or loan servicer, there are different tactics that are available:

• Loan modification – address the terms and conditions of the loan itself
• Lien modification – the lender modifies the current loan so that the borrower can qualify to refinance into a new loan
• Short sale – the lender agrees to the house being sold at a price lower than the mortgage amount

Each of these solutions has different advantages depending on the homeowner’s situation and goals. Working as an arbitrator with the borrower and lender’s interests in mind, Loan Modification Masters works with a proven Law Firm that negotiates to find the best solution for each individual case.