| When applying for a loan modification under | | | | In other words they can still make a little profit |
| Obama's new stimulus package 'Make Home | | | | and avoid the problem of having to take on |
| Affordable' one of the requirements is that you | | | | another house due to foreclosure that they are |
| need to explain why you cannot meet your | | | | unlikely to be able to sell at a price that could |
| current mortgage repayments i.e. why you are in | | | | repay the loan if at all. |
| financial difficulty. | | | | So you can see that convincing them that you |
| The reason for this is that although your lender is | | | | are in difficulty is crucial for getting accepted into |
| given an incentive by the government in the form | | | | the program. The best chance you have of doing |
| of a financial grant, they would much prefer you | | | | this effectively is to put together a well |
| to continue paying your mortgage at the standard | | | | constructed and clear hardship letter that gives |
| rate and not a new lower rate that will give them | | | | the lender all the information they need in order |
| less of a profit. | | | | to consider your application. |
| That said if you can convince them that you are | | | | There will be times that the lender will provide a |
| genuinely in financial difficulty and are likely to | | | | form for this purpose and if they do make sure |
| default on repayments or in fact have defaulted | | | | that you fill it in completely, ledgibly and with no |
| then their preference would be that, if you can, | | | | spelling mistakes. |
| you continue to pay back the capital of the loan | | | | An alternative method is to use a hardship letter |
| and that they do get at least some level of | | | | sample on which to base your application and |
| interest from you. | | | | contains all the information the lender needs. |
