Archive for year: 2013

Sample Hardship Letter : To perform the most comprehensive forensic loan audit you should compile all of the loan documents you maintain and get all of the loan documents your lender maintains. A Qualified Written Request (QWR) is a written demand to your servicing company. After receiving a QWR, the servicing company has twenty days to respond to the request and forward a copy of all loan documentation on file. The servicing companies also have to suspend all reporting activity to the major credit bureaus and then resolve the issue within sixty days. Federal RESPA laws require the servicing companies to comply and respond within this specified time frame. A QWR will be generated by you and submitted to the servicer for every file prior to the completion of the forensic loan document audit.

Sample Hardship Letter

American Home Mortgage Services, Inc

Attention: Correspondence Dept.

Re: Loan Number: 1234511722

Name : Johnathan Jones

Subject Address : 12345 Erehwon Street, Heartland, OH 12345

To Whom It May Concern: Please accept this letter as a “Qualified Written Request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA) to obtain copies of ALL documents pertaining to the origination of the above mentioned Clients’ current mortgage on the referenced subject property. Please see below for a list of documents needed.

Initial Loan Application and Final Loan Application

Executed Notice of Right to Cancel (if refinance)

Deed of Trust/All Riders

Note and All Addendums/Riders

Truth-in Lending Statements

Itemization of Amount Financed

Good Faith Estimates

Estimated and Final Closing Statements (HUD)

Appraisal

Title Report

Grant Deed(s)

Copy of Loan Payment History – This must include all payments made, all fees incurred, any and all escrow account disbursements and how payments were appliedIn addition to the above, please forward any and all disclosures, rate sheets etc. associated with the above transaction. Please note that all copies need to be clear and legible and all documents should be copied in their entirety.

In closing, We/I understand that under Section 6 of RESPA you are required to acknowledge our/my request within 20 business days and try to resolve any issues within 60 business days.

Please forward requested documentation as soon as possible and we look forward to working with you on a solution that benefits our mutual concerns. Thank you for your time.

Sincerely,

Lenders and servicers will, in general, look for one thing when you submit a modification request. They look for a documentable hardship of course, but at the end of the day if they decide to grant your request for a loan modification all they really want to know is if you can afford the new payment(s). This is the big secret behind getting a loan modification approved. There is, however, an art to making loan modifications work. You must disqualify yourself from your old payments and at the same time qualify yourself on a new payment structure. It sounds complicated and it is at first but you will quickly learn important strategies for effectively processing loan modifications. To understand what the lender or servicer considers qualified, you have to know how lenders calculate your income. The income you can use to qualify for a modification is different from traditional income calculations used to qualify for traditional loans. Moreover, the difference in the qualification guidelines is typically in your favor.

For a modification, you can qualify based on your documentable total household income. As such, you can count income from almost any source: Grandma’s SSI, income from child day care services, from a second job paid under the table, etc. so long as it can be proved. Proof must be in the form of bank statements, 1099’s or in some other documentable form as outlined in the submission paperwork you will provide the lender. In addition, if only one of two spouses was on the original loan, the other spouse’s income can count so long as it is documentable.

Once you calculate all documentable monthly income from all household sources you then have what you can present to the lender as the new qualifying income. To calculate a qualifying monthly mortgage payment, use the benchmark fully amortizing 5.00% rate on whatever the new balance might be, counting arrearages if they are added back into the loan. WARNING: this is only for a general qualifying exercise only; do not expect this rate or payment! If the payment at 5.00% is just too high, then you may not be an appropriate candidate for a modification. However, you can still request help with other services such as a deed in lieu of foreclosure, a short sale or postponing as long as possible a notice of trustee’s sale in an effort to help you transition to more affordable housing.