- 1). Call your mortgage lender. This is the company to which you send your mortgage payments each month. Ask to speak to a loan officer. Once you are connected, explain that you're struggling to pay your mortgage each month and that you'd like to have a portion of your principal balance forgiven.
- 2). Ask your lender if it is participating in the federal government's mortgage assistance program, the Home Affordable Modification Program. If it is, your lender might be more willing to work with you on a mortgage modification. Under the government program, lenders receive a payment from the government every time they modify the mortgage loan of a struggling homeowner. But even if your lender isn't participating in this program, it can still modify your loan and forgive a portion of your principal balance. It just won't receive a financial reward from the government for doing so.
- 3). Compose a hardship letter that explains why you can't afford your monthly mortgage payment. You might have lost a job. You might be suffering through an illness that has reduced your ability to earn income. Your company might have laid you off for three months. Whatever the reason, including it in your letter.
- 4). Make copies of any financial documents that will bolster your argument that your gross monthly income has taken a beating while your monthly debts have remained the same. Make copies of your most recent federal income tax return statement, your last two work paycheck stubs, your bank savings and checking account statements or your credit card bills. Send these copies and your hardship letter to your lender.
- 5). Accept your lender's offer to reduce your principal balance if it has found that your financial setback is severe enough to warrant such a move. Sign any papers that your lender requires to make this official.
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