As I mentioned in Emergency Mortgage Assistance Program (EMAP) ...... Eligibility Requirements, the first and most important requirement, in my opinion, that a Homeowner needs to meet is proof of a financial hardship that was created by circumstance that were out of their control. The financial Hardship cannot be because of financial mismanagement, but can be eliminated through EMAP assistance within the maximum 60 month period. Because the Hardship Requirement is so important I am writing this blog Emergency Mortgage Assistance Program (EMAP) ...... Hardship Letter specifically to address the Financial Hardship requirement and what the Financial Hardship Letter needs to address.
The two main reasons that the Emergency Mortgage Assistance Program (EMAP) will consider as a Financial Hardship is:
- A Reduction of Income - the reduction can be for reasons such as
- Unemployment - loss of a job, laid off
- Reductions in the number of work hours would constitute a reduction in Income.
- Underemployed - this would be if the Homeowner lost a job, but later found another job, but at a lower incomel, or had to take a job in a lower paying field
- A Loss, Reduction, or Delay in the Receipt of:
- Federal, State, or Municipal Benefits
- Private Benefits such as:
- Disability, or
- Death of a spouse or other family member that was on the mortgage, and contributing to the monthly payment.
- An Increase in Expenses - the increase in expenses could be because of additional family responsibilities, like:
- Significant increase in the mortgage payment
- Unanticipated rise in housing expenses
- Taking care of an elderly parent
- Child Care
- Divorce - loss of support payment, or due to alimony and child support
- Medical Expenses
The above all constitute a legitimate reason for a Hardship. What does not constitute a legitimate reason for a Hardship, is anything that would be seen as Financial Mismanagement, such as :
- Increased credit card debt
- Debt for Recreational purposes
- Restaurant Debt
- Hotel Debt
- Incurred debt because of Vacation
- Incurred debt because of Gambling
- Incurred debt for Non essential items
- Financial difficulties prior to there being a legitimate hardship
If the Emergency Mortgage Assistance Program (EMAP) ...... Hardship Letter, shows ANYTHING that would indicate that the Homeowner's financial problems are because of Financial Mismanagement, assistance will most likely be denied.
The Emergency Mortgage Assistance Program (EMAP) ...... Hardship Letter, also needs to be very detailed. The Hardship Letter cannot just be a quick couple of paragraphs, it needs to give specific detailed reasons for the Financial Hardship.
- What caused the Hardship
- What steps were taken to try rectify it
- What other problems were created because of the initial Hardship
All this needs to be very detailed. The Emergency Mortgage Assistance Program (EMAP) ...... Hardship Letter is not a time to take short cuts in describing and documenting the Financial Hardship.
The next and final blog in this series will be on how the Emergency Mortgage Assistance Program (EMAP) Level of Assistance is determined, and an example of how Emergency Mortgage Assistance Program (EMAP) assistance is calculated.
Other Blogs In This Series:
Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or firstname.lastname@example.org