How Important Is A Hardship Letter?
As the economy continues to struggle, more Americans will be affected by unemployment and may face foreclosure. If you find yourself in a financial bind, a well written hardship letter directed to the bank or mortgage company is essential. Although the hardship letter is most often associated with borrowers facing foreclosure, it can be beneficial in other borrower-lender situations. If you are unable to make payments on credit cards, car loans or other major loans, the hardship letter is vital. The hardship letter is the first proactive step a borrower must take in the quest for cooperation and assistance from the lender. In the current economy, the most common situation is the borrower attempting to avoid foreclosure. Most of these borrowers are seeking a loan modification or a “short sale”. Most lenders require a hardship letter from the borrower.
It depends on the lender. For some lenders, it’s very important (never underestimate the “human element”), to other lenders it’s just something they check off their list. Oftentimes, a good cover letter that pulls all the elements of your application together can be more important than the hardship letter.
