| How to Write An Economic Hardship Letter? | | | | every month on these medicines." |
| | | | "We had recently borrowed $20,000 from our |
| [Malik Ahmad is a Las Vegas Attorney having his | | | | pension and which was spent on paying all the old |
| own law office. He can be reached at He is | | | | bills. We ran out this money quickly, and now the |
| admitted to all the courts in the state of Nevada. | | | | Pension Fund has placed severe restrictions on |
| His areas of practice include real estate, | | | | any more withdrawal." |
| bankruptcy and loan modification]. | | | | "My wife who worked as a registered nurse in |
| By far writing and inclusion of a hardship letter is a | | | | the local hospital always wanted to pursue a |
| must (a sine quo nun to use the legal lingo) and | | | | master degree in public health administration |
| most sought after requirement by your lenders. | | | | (MBA, Public Administration, Nurse Practitioner etc). |
| This hardship letter does not require and asking | | | | She has enrolled in the University of Nevada in |
| for the best English language writing skills but at | | | | their master program where one more year has |
| least it mandates a strong composition which | | | | left in her completion. She likes to become a |
| details all the hardship you are presently suffering. | | | | university nursing teacher. Our expenses are |
| Give them a laundry list of all the economic | | | | quadrupled because of her enrollment and doing |
| problems you have. Don't make it too long. A | | | | lesser numbers of hours at her regular |
| synopsis is enough. Here, in this brief article I am | | | | employment". |
| going to touch all those spots on which your | | | | "I am enrolled in an MBA Program in the |
| lender may base its loan modification decision. | | | | University of Phoenix (CPA, Law school, chef |
| Remember, the other supporting documents your | | | | school, auto technician course, vocation schools |
| lender requires are: (1) the bank statements; (2) | | | | etc). It is night program which is extended to 4 |
| the tax record for two years and (3) the | | | | years degree program. I have almost finished the |
| paystubs. Almost every lender requires this | | | | first two years. It was a wise expenditure of my |
| hardship letter. Here, I am giving first all the | | | | savings as I was expecting a promotion in the |
| hardship points which may or may not be | | | | place of my work. Hopefully, someday I would be |
| required and suitable in each and every case, but | | | | rewarded for this hard work." |
| which you can edit to suit your particular needs. | | | | 3. General Situation: |
| 1. Hardship about yourself: | | | | "We had a lower interest rate initially for the first |
| You are telling your own | | | | two years. We had a good FICO score and |
| story. Write like a story. | | | | always though that we can get better interest |
| "I had a continuous job at the IBM for the last 7 | | | | rate. Our loan officer promised us that once we |
| years, and the company shut down the local plant. | | | | are entrenched in our home for some time, we |
| Consequently, I was laid off from work. I have | | | | would be eligible for better interest rate. We had |
| been looking for work for quite some time. | | | | not seen any better interest rate other than the |
| Initially, I was drawing unemployment | | | | fact that these interests are constantly rising. We |
| compensation, but since last few weeks (or | | | | used to pay a payment of $1650 per month, |
| months) I have ran out of this compensation. I | | | | which was increased for an upward adjustment |
| almost send my resume to various employers. | | | | to $1850 and now since the last three months |
| Due to the current hardship, I am not getting | | | | had gone up to $2450. This is an exorbitant |
| many responses. | | | | amount which unfortunately we cannot pay. |
| "We barely are making our normal household | | | | There is a choice to either pay for the basic |
| expenses. If you look at our history of mortgage | | | | necessities of life or pay just the mortgage only. |
| payments, you would see that we had a pattern | | | | We had also seen a sharp increase in our utilities |
| of timely payments on our mortgage since | | | | bill including the cost of transportation. |
| originally we bought this home in 1999. It is only | | | | Furthermore, my commute time has been |
| three months ago when we were first delinquent. | | | | increased due to our work place relocated in far |
| We though we would catch up. Initially, we | | | | off place from my home." |
| borrowed from our lines of equity, but that has | | | | "Our loan officer always told us that our interest |
| been cut down and now frozen by our bank. We | | | | rate is locked at 5% percent. We were shocked |
| do not like to borrow from family and friends at | | | | when our attorney friend came to our home for |
| this time." | | | | a social function and we showed him our escrow |
| 2. About Your Family: | | | | papers. According to him, there are quite a few |
| "Luckily, my wife is still employed. She is | | | | violations of RESPA and TILA. We were never |
| employed as a registered nurse at the local | | | | provided a copy of the good faith estimate. We |
| hospital. She used to work overtime, but because | | | | were not provided this entire disclosure certificate |
| of the depressing conditions, the hospital had cut | | | | under TILA. Our attorney friend had told us that |
| down her overtime. Additionally, she worked part | | | | in his opinion we are a victim of some predatory |
| time but recently the County had laid down its | | | | lending practices, and that we should seek an |
| benefit program for the indigent". | | | | immediate legal help. He also told us to seek some |
| "We had lately an extended family in our home as | | | | forensic loan audit." |
| parents of my wife had joined us. My 82 mother | | | | "We are not litigious people. At this time we are |
| in law is in frail health accompanied by my 92 | | | | requesting a loan modification with a significant |
| years old father in law. Presently, both are living | | | | decrease in our interest rate as well as a |
| with because they rural place where they lived | | | | reduction in our principal balance. We are not |
| had no modern medical facilities. My mother in law | | | | delinquent kind of people. We like this home, and |
| is suffering from Alzheimer. My wife had to take | | | | like to continue staying here. This has been a part |
| her quite often to the local professional medical | | | | of our American Dream. Our economic hardship is |
| offices. They had to go at least three times a | | | | temporary and hopefully would resolve in next |
| week. Even though our in laws sometime | | | | few years. At this time we are requesting a loan |
| contribute in household things but largely we bear | | | | modification with a significant decrease in our |
| the expenses." | | | | interest rate as well principal. Interest rates are |
| "Unfortunately, our 10 year old son was diagnosed | | | | historically low and your bank had also accepted |
| with the disease of the liver. We had to buy the | | | | federal bailout money. We do not anticipate |
| latest medicine which is not covered by our health | | | | another loan modification, and if this done right we |
| plan, and there is no generic substitute of these | | | | would abide by all the terms and conditions set by |
| medicines. We had to spend an upward of $300 | | | | it. |