Due to one of the worst recession ever, it is affecting every market. One of badly hit is housing market. There is a huge credit crunch as people are losing jobs or getting drastic pay cuts as a result are unable to pay timely installments for their loan. US government's home loan modification is a boon for people not able to repay loans for financial problems. A large section is still unaware of how to avail the loan modification benefit and what are the criteria needed to be a beneficiary of this service.

Hardship letter

Any mortgage lender or lending agency will ask you to submit a hardship letter when applying for a loan modification program. Hardship letter should focus on following points

Cause of your Hardship:

This part should clearly state the reason that has led you to current position. There should be a strong reason and it should be well documented for your lender to consider your request. Reason should be brief and clearly focus on your inability to repay loan. You should mention your own reason for mortgage loan modification rather than anyone else reason who has succeeded as beneficiary of this scheme.

Repercussion of hardship on your ability to repay loan

You should be able to explain how your hardship has affected your position to repay loan. For e.g. you can mention that as salary is cut by 50 percent you are unable to pay timely installments and hence are applying for mortgage modification program.

Current situation

This part depicts your current financial position. Here it should be mentioned about your current job, what is your pay and job status. It should be stated that it is possible for you to pay a certain amount every month as a result of your current job. Current situation is highly looked at when considering a home loan modification request. From your current situation money, lending agency can foresee whether you would be able to repay the loan and at what terms it would be best for you to repay the loan.

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