Associated Mortgage Negotiators

of America, LLC
 
About Us Catalog Short Sale Loan Modification Contact Us  

Every mortgage has guidelines for a short sale or loan modification.  Knowing the options contained in the guidelines is the first important step. 

The mortgage service company that collects your mortgage payment each month works only for the owner of your mortgage loan.  Most of the time the mortgage service company does not own your mortgage but acts as a collection agent for the real owner of your mortgage loan.

 

 
A hardship is a very important part of qualifying for any form of loss mitigation such as a loan modification or a short sale.  Without a qualifying hardship, most mortgage lenders will not agree to a loss mitigation alternative like a loan modification or short sale. 

Most loss mitigation guidelines require the loan to be in trouble or soon to be in trouble before they will qualify a loan for a modification or a short sale.  A loan is in trouble only when it is not being paid or if it appears the borrower will soon not be able to pay the mortgage.

What is a hardship

A hardship is an unexpected event out of the control of the borrower.   The event causes a loss of income to the borrower.  The income loss makes it impossible for the borrower to pay the mortgage.

Hardship letter

There are 4 major parts to a hardship letter.  The first is a request for loss mitigation through a loan modification or a short sale.  The second part states the borrower had adequate income at the time the house was purchased.  The third part describes the involuntary loss of income.  The last part states the borrower is unable to continue paying the mortgage because of the involuntary loss of income.
Qualifying Hardships
The following circumstances qualify as involuntary circumstances creating a hardship.   A Borrower is considered to have an involuntary inability to pay if he or she does not have the ability to make the monthly payments because of an involuntary reduction of income due to:
  • Business Failure
  • Casualty Loss
  • Unemployment
  • Curtailment of Income
  • Distant Employment Transfer
  • Death in Family
  • Death of Mortgagor
  • Illness in Family
  • Illness of Mortgagor
  • Divorce
  • Separation
  • Military Service
  • Interest Rate and Payment Adjustment
  • Fraud
     
Non-Qualifying Circumstances
Poor investments are not qualifying hardships.

Lower Property Value

Buying a property and having the value fall is a poor investment and not a hardship.  For example, a person purchases a property for $200,000 and gets a mortgage for $160,000.  Some time after the purchase, the property value declines to $150,000.  This is a poor investment and not a hardship.

Circumstances within a borrower's control causing an income loss are not qualifying hardships. 

Career Change

Choosing to make less money is not a hardship.  For example, a person has been employed as automobile mechanic for many years making $20 per hour.  Repairing automobiles is no longer satisfying but being a dance instructor seems to be more fulfilling.  He quits his job and begins work as a dance instructor for $12 per hour.  This is not a hardship but a career choice for less pay.

Unemployed for Cause

Getting fired for cause is not a hardship.  A person is habitually late to work.  The employer gives the employee many verbal and written warnings.  Finally, the person is fired for cause and is unemployed.  Being fired for cause is not a hardship.
 
 
     
 
Loan Modification Help
 
     
 
Short Sale Help
 
     
 
Local Resources
 
     
 
Know Your Rights
 

Copyright [2011] [Associated Mortgage Negotiators of America LLC]. All rights reserved