How Do You Write a Hardship Letter to Stop Foreclosure?

When written properly and containing the appropriate information, hardship letters can stop or pause foreclosure.

To write a hardship letter on your behalf to stop foreclosure, our lawyers must identify the specific reason why you defaulted on your mortgage and offer a solution that convinces the lender to agree to mortgage forbearance or loan modification. Examples of undue financial hardships include job loss, illness, and divorce. Because we must offer supporting documents alongside hardship letters and borrowers have little time to respond to notices of intent, it is important to have our lawyers start drafting this letter as soon as possible. Suppose the lender refuses to entertain your hardship letter. In that case, our lawyers may be able to convince the judge assigned to your case that you are experiencing undue financial hardship, and the bank may not foreclose on your home.

For a free case assessment from our Pennsylvania mortgage foreclosure defense lawyers, call Young, Marr, Mallis & Associates today at 215-639-5297.

How to Write a Hardship Letter to Your Lender to Stop Foreclosure

By clearly explaining a difficult financial situation due to a recent life change or another major event, our lawyers may convince your lender to agree to forbearance or loan modification to stop foreclosure.

Much of the introductory information in a hardship letter should include the borrower’s personal information, such as their name and contact information. This allows the bank to easily identify you and your loan after receiving the hardship letter.

Our mortgage foreclosure defense lawyers will then discuss the specifics of the undue financial hardship that has caused you to default on your loan. Being diagnosed with a serious illness or condition that makes you unable to work or perform at the same earning capacity could qualify you for forbearance. This would temporarily pause your mortgage payments, giving you time to get your finances in order before they resume.

Whatever the cause of your financial hardship, whether it is a recent divorce, the death of a borrower, job loss, illness, a natural disaster, or unforeseen expenses, our lawyers must expressly explain the situation in the letter. We will also propose our solution to the situation and your specific goals. For example, many borrowers wish to stop foreclosure to keep their homes, so our lawyers may propose a loan modification in the hardship letter after thoroughly reviewing the current mortgage terms and your financial limitations.

Hardship letters that are incomplete or fail to explain the situation to banks may be somewhat ignored by lenders, who may want to proceed with foreclosure. Lenders do not have to agree to forbearance or loan modification unless compelled by a judge, even after being informed of a borrower’s undue financial hardship.

How Long Do You Have to Stop Foreclosure with a Hardship Letter?

After you get a notice of intent to foreclose from your lender, you will only have a short period to explain your current financial difficulties and get the bank to agree to an alternative solution before it can file a foreclosure petition in court. Because of this, it is crucial to have our lawyers quickly assess your finances, write a hardship letter, and negotiate with your bank.

Banks can typically file mortgage foreclosure petitions in court 30 days after sending a notice of intent to foreclose to a borrower. As soon as you get this notice, explain the reason why you defaulted to our lawyers, and we can confirm whether or not it is considered an undue financial hardship and proceed accordingly.

Offering supporting documents alongside hardship letters can increase the likelihood that the bank will take our requests for forbearance or loan modification seriously. For example, if a sudden job loss made you default on your loan, our lawyers may provide income and bank statements to confirm your lack of income and strengthen your hardship letter. If a recent medical diagnosis contributed to your defaulting, we may offer medical statements so the bank appreciates the severity of the situation. Having time to organize this supporting evidence is important, so take the notice of intent seriously after you receive it in the mail.

Can You Convince a Judge to Stop Foreclosure Because of Financial Hardship?

Suppose your lender refuses to consider your hardship letter and wants to proceed with a judicial foreclosure to get paid faster. In that case, our lawyers can explain your challenging financial situation to the judge assigned to your case, who may agree that the bank cannot take your home. This is only possible if you live in a judicial foreclosure state that requires cases to go through the courts, like Pennsylvania and New Jersey.

For this to happen, our lawyers must present evidence of your undue financial hardship. Judges may be more likely to delay foreclosure because of financial hardship if it is temporary. For example, suppose you recently lost your job because of company-wide layoffs. In that case, our lawyers can demonstrate that you are actively seeking reemployment to convince the judge that your current situation is temporary and you will be able to satisfy the loan terms shortly.

Though judges do not always dismiss foreclosure complaints because of undue financial hardship, they might oversee loan modification during the judicial foreclosure process, especially if homeowners are struggling financially.

Not every homeowner defaults on their mortgage because of exceptional financial hardship, which can put them in a difficult situation should their lenders initiate foreclosure proceedings. In these instances, our lawyers may suggest filing for bankruptcy. Because of the automatic stay associated with bankruptcy, lenders cannot continue with foreclosure after borrowers file. Instead, they will be repaid during the bankruptcy case, which a judge will also oversee.

Call Our Lawyers for Help Stopping Mortgage Foreclosure

For help with your case, call Young, Marr, Mallis & Associates’ Philadelphia mortgage foreclosure defense lawyers at 215-639-5297.