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Understanding Your Financial Situation

Think about Your Situation

When you talk to your loan servicer or a housing counselor be prepared to tell them about your situation.

Use this worksheet to summarize your circumstances.Please be as accurate and detailed as possible.

• When did you miss your first payment (date)?
  
• Why did you miss this and any other payments?
• How have you tried to fix your financial situation?
• Do you expect your situation to change soon?
• Do you have any other resources to help you?

Once you complete this exercise, you will be ready to write a Hardship Letter. Servicers will typically require that you submit a Hardship Letter when requesting assistance.

CALL YOUR MORTGAGE COMPANY/SERVICER IF YOU KNOW YOU’LL BE LATE AND ALWAYS RETURN THEIR CALLS!!

How to Write A Hardship Letter

(Adapted from NeighborWorks)

A financial hardship results from an involuntary reduction in income or an unavoidable increase in expenses.

Common Involuntary Reductions of Income:

• Unemployment
• Mandatory reduced hours or hourly wage
• Under employment after the loss of previous job
• Death of a borrower
• Decline in business earnings if self employed
• Permanent or short-term disability
• Serious illness of a household member
• Divorce

Unavoidable Increases in Expenses

• Major medical expenses
• Disaster
• Urgent property repairs
• Increase in childcare expenses
• Mortgage loan and payment changes

A hardship letter is a brief and to the point overview of the homeowner’s situation. It is ideally only four paragraphs and no more than two pages.

CALL YOUR MORTGAGE COMPANY/SERVICER IF YOU KNOW YOU’LL BE LATE AND ALWAYS RETURN THEIR CALLS!!

How to Write A Hardship Letter

(Adapted from NeighborWorks)

The letter must include:

• Homeowner’s name(s), address and phone number(s)
• Loan number(s)

The first paragraph should include:

• Other relevant details about the loan or the property, such as the number of months delinquent, property value, etc.

The second paragraph should include:

• A matter of fact description of what caused the default -
• Avoid blaming others for what occurred

The third paragraph should provide an overview of the homeowner’s financial situation:

• Actions the homeowner has taken to reduce expenses and increase income
• Financial counseling or other steps the homeowners have taken to resolve the situation
• The amount of money the homeowner has saved to pay towards the delinquency

The fourth paragraph should briefly outline the desire to prevent foreclosure.

• Reasons why the homeowners believe they will be successful
• Demonstration of their commitment to see it through to its end

The last paragraph should indicate the preferred times and methods for contacting the homeowner (and their HUD approved housing counseling agency, if applicable).

Documents to attach:

• Financial statement
• Income and expense verifications
• Documents that support or verify the hardship
• Verification for anticipated changes to income and expenses
• Other documents requested by servicer or counselor

To help you get started on your own hardship letter, please see the Hardship Letter Sample.

CALL YOUR MORTGAGE COMPANY/SERVICER IF YOU KNOW YOU’LL BE LATE AND ALWAYS RETURN THEIR CALLS!!

Let’s work together!

Derek O’Toole

Helping Hands Solution AZ