Sample Foreclosure Letters and Legal Forms

Although each state’s foreclosure laws vary extensively, homeowners normally need to respond to a foreclosure lawsuit within 20 or 30 days, meaning a homeowner will file a Motion for Extension of Time or Motion to Dismiss the lawsuit before filing an Answer. They may also file their answer and Affirmative defenses with the same issues raised in a Motion to Dismiss.

Sample Foreclosure Answer

IN THE CIRCUIT COURT OF THE __ JUDICIAL CIRCUIT, IN AND FOR __ COUNTY,___

CIVIL DIVISION

Case No.:_____

____ BANK, Plaintiff,

vs.

JOHN HOMEOWNER, Defendant.

__________________________/

DEFENDANT’S ANSWER AND AFFIRMATIVE DEFENSES

Defendant (Your Name Here), Pro Se, files its Answer and Affirmative Defenses and as grounds therefore states:

(SAMPLE) ANSWER

                                                                   COUNT I

  1. Without knowledge and Deny.  (Admit or Deny based on the allegations)
  2. Admit.
  3. Deny.
  4. Deny.
  5. Deny.
  6. Deny.
  7. Deny.

COUNT II

8.Admit.

9.Admit.

10.Deny.

11.Deny.

12.Admit.

13.Without knowledge and Deny.

14.Without knowledge and Deny.

Defendant denies each and every allegation not expressly admitted herein and demands strict proof thereof

Defendant (Your Name Here) demands trial by jury on each and every issue so triable as a matter of right.

Affirmative Foreclosure Defenses

The Affirmative Defenses is listed in numbered paragraphs that may apply to the homeowner’s case. A homeowner should meet with a lawyer if possible to discuss possible affirmative defenses and decide which if any of the defenses must be raised before filing their Foreclosure Answer. Certain states require you to raise issues related to court jurisdiction and other state specific issues so be sure to check which of your defenses may be better suited or specifically required to be filed before your Foreclosure Answer.

Sample Short Sale Documents and Short Sale Options

Once a homeowner has reviewed their Short Sale options, they will either hire a professional or handle it themselves.  For some, a realtor with Short Sale experience can be helpful in finding potential buyers and gathering materials to convince the bank that their mortgage is underwater. There should be no upfront costs as the realtor gets paid if and when the Short Sale is approved and completed.

If a homeowner decides to handle the short sale on their own, they should try to find a buyer willing to commit to a short sale process before asking the bank for short sale authorization.

Sample Short Sale Cover Letter

Loan Owner

123 Main Street

City, State, Zip Code

Re: Property Address: Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. As a result, we have no option but to pursue a short sale of our property and [we’re currently looking for a buyer to purchase our home] OR [we’ve located a buyer willing to purchase our home for $_____] and need your approval to move forward.

To support the request to sell our home for less than the loan amount, we’ve attached a financial hardship letter summarizing our overall economic condition and how we got there. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and that the amount of the loan is much more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is through a short sale. This option – including agreement to waive any resulting deficiency balance – allows us to work together and get on with our lives while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

As you know, time is of the essence so please contact me as soon as possible to confirm your approval or let us know if you need any additional information for the confirmation of our request.

Thanks in advance for your anticipated cooperation.

Sincerely,

[HOMEOWNER]

Sample Short Sale Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Financial Hardship Letter will summarize our current financial situation, explain how we got here and support the request for a “short sale” of our home to avoid a foreclosure lawsuit with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and our resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household income has been significantly reduced. In fact, our income has been reduced from $____/month in 2010 to $_____/month currently. Although I hope to return to work as soon as possible, there’s nothing imminent and I have no real idea how long it will take. Until that time, we have little or no income and simply can’t continue to make loan payments.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and uncertainty as to when it will improve as well as the unavailability of equity based credit, we have no option but to work with you to sell the property for as close to the mortgage as possible. By agreeing to waive any resulting deficiency balance, which is not collectable anyway, you’ll make the transaction feasible for us and fair overall.

The alternative in light of our dire financial condition is a long and expensive foreclosure lawsuit for the bank with the same inability to collect any deficiency balance. Further, rather than disposing of excess inventory through a sale of our home, you’ll just end up with another property to maintain and eventually dispose of at a greater loss.

Please let us know if you need any additional financial information.

Sincerely,

(Homeowner)

Sample Loan Modification Cover Letter

Lender

Lenders Address

Re: Property Address/ Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. Accordingly, we are requesting a loan modification to lower our monthly payments and more accurately reflect the actual value of our home. At that time, we’ll be able to afford payments and our home will no longer be a losing investment.

To support the request for a loan modification, we’ve attached a financial hardship letter summarizing our overall economic condition and how we got there. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and amount of the underlying loan is much more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is through a loan modification. This option allows us to work together and stay in our home for years to come while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

Based on the underwater status of our mortgage, reducing the principal amount of our loan is the fairest way to reduce payments. If necessary, we can look at a combination of reducing the principal and adjusting the interest rate or length of the loan to facilitate reduced payments which is our immediate goal.

As you know, time is of the essence so please contact me as soon as possible to discuss available options and of course let us know if you need any additional information.

Thanks in advance for your anticipated cooperation.

Sincerely,

[HOMEOWNER]

Sample Loan Modification Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Hardship Letter will summarize our current financial situation, briefly explain how we got here and provide you with the information needed to properly review our request for a loan modification. Once approved, the loan modification will let us stay in our home and avoid a foreclosure process with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household finances have been greatly damaged. In fact, our income has been reduced from $____/month to $_____/month currently with expenses of $______/month.  Although I expect to return to work in the near future, we need assistance in the short term to keep payments on track and eventually resume normal operations.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and the unavailability of equity based credit, a loan modification is the only option that will allow us to remain in our home while at the same time protecting our financial future. By agreeing to a principal reduction that results in lower payments overall, you’ll help us survive this temporary setback while modifying the loan to more accurately reflect current property values and once again making home ownership a worthwhile investment.

The alternative in light of our difficult financial condition is a long and expensive foreclosure lawsuit for the bank with nothing to gain but more real estate to add to an already bloated inventory.  Add to that the costs of insurance, taxes and general maintenance and it’s pretty clear that a fair and reasonable loan modification is the best outcome for all involved.

Please let us know if you need any additional financial information and thank you for your time and consideration.

Sincerely,

(YOUR NAME)

Sample Deed in Lieu of Foreclosure Cover Letter

Bank

Address

Re: Property Address & Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. As a result, we have no option but to convey the property back to you using a Deed in Lieu of Foreclosure and need your approval to move forward.

To support our decision to execute a Deed in Lieu of Foreclosure in your favor, we’ve attached a “financial hardship” letter summarizing our overall economic condition and how we got here. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and that the amount of the loan is far more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is to move on and return our home back to you. This option – including agreement to waive any resulting deficiency balance – allows us to work together and get on with our lives while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

As you know, time is of the essence so please contact me as soon as possible to confirm your approval or let us know if you need any additional information for the confirmation of our request.

Thanks in advance for your anticipated cooperation.

Sincerely,

[Your Name]

Sample Deed in Lieu of Foreclosure Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Financial Hardship Letter will summarize our current financial situation, explain how we got here and support the request to enter into a deed in lieu of foreclosure with the bank to avoid a foreclosure lawsuit with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and our resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household income has been significantly reduced. In fact, our income has been reduced from $____/month in 2010 to $_____/month currently with monthly expenses exceeding $_______including the mortgage payment. Although I hope to return to work as soon as possible, there’s nothing imminent and I have no real idea how long it will take. Until that time, we have little or no income and simply can’t continue to make loan payments.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and uncertainty as to when it will improve combined with the unavailability of equity based credit, we have no option but to convey our property back to you through a deed in lieu of foreclosure. By agreeing to waive any resulting deficiency balance, which is not collectable anyway, you’ll make the transaction feasible for us and avoid the need to simply walk away or declare bankruptcy to reach the same result.

The alternative in light of our dire financial condition is a long and expensive foreclosure lawsuit for the bank with the same inability to collect any deficiency balance. Both a decision to defend the lawsuit or file bankruptcy would greatly delay the process and increase your costs, as would simply walking away without working with you.

As you can see, a deed in lieu of foreclosure is clearly the best option for all involved as the bank gets the same result without cost and delay.

Please let us know if you need any additional financial information and thank you for your time and assistance.

Sincerely,

(Your Name)

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Sample Foreclosure Letters and Legal Forms

Although each state’s foreclosure laws vary extensively, homeowners normally need to respond to a foreclosure lawsuit within 20 or 30 days, meaning a homeowner will file a Motion for Extension of Time or Motion to Dismiss the lawsuit before filing an Answer. They may also file their answer and Affirmative defenses with the same issues raised in a Motion to Dismiss.

Sample Foreclosure Answer

IN THE CIRCUIT COURT OF THE __ JUDICIAL CIRCUIT, IN AND FOR __ COUNTY,___

CIVIL DIVISION

Case No.:_____

____ BANK, Plaintiff,

vs.

JOHN HOMEOWNER, Defendant.

__________________________/

DEFENDANT’S ANSWER AND AFFIRMATIVE DEFENSES

Defendant (Your Name Here), Pro Se, files its Answer and Affirmative Defenses and as grounds therefore states:

(SAMPLE) ANSWER

                                                                   COUNT I

  1. Without knowledge and Deny.  (Admit or Deny based on the allegations)
  2. Admit.
  3. Deny.
  4. Deny.
  5. Deny.
  6. Deny.
  7. Deny.

COUNT II

8.Admit.

9.Admit.

10.Deny.

11.Deny.

12.Admit.

13.Without knowledge and Deny.

14.Without knowledge and Deny.

Defendant denies each and every allegation not expressly admitted herein and demands strict proof thereof

Defendant (Your Name Here) demands trial by jury on each and every issue so triable as a matter of right.

Affirmative Foreclosure Defenses

The Affirmative Defenses is listed in numbered paragraphs that may apply to the homeowner’s case. A homeowner should meet with a lawyer if possible to discuss possible affirmative defenses and decide which if any of the defenses must be raised before filing their Foreclosure Answer. Certain states require you to raise issues related to court jurisdiction and other state specific issues so be sure to check which of your defenses may be better suited or specifically required to be filed before your Foreclosure Answer.

Sample Short Sale Documents and Short Sale Options

Once a homeowner has reviewed their Short Sale options, they will either hire a professional or handle it themselves.  For some, a realtor with Short Sale experience can be helpful in finding potential buyers and gathering materials to convince the bank that their mortgage is underwater. There should be no upfront costs as the realtor gets paid if and when the Short Sale is approved and completed.

If a homeowner decides to handle the short sale on their own, they should try to find a buyer willing to commit to a short sale process before asking the bank for short sale authorization.

Sample Short Sale Cover Letter

Loan Owner

123 Main Street

City, State, Zip Code

Re: Property Address: Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. As a result, we have no option but to pursue a short sale of our property and [we’re currently looking for a buyer to purchase our home] OR [we’ve located a buyer willing to purchase our home for $_____] and need your approval to move forward.

To support the request to sell our home for less than the loan amount, we’ve attached a financial hardship letter summarizing our overall economic condition and how we got there. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and that the amount of the loan is much more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is through a short sale. This option – including agreement to waive any resulting deficiency balance – allows us to work together and get on with our lives while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

As you know, time is of the essence so please contact me as soon as possible to confirm your approval or let us know if you need any additional information for the confirmation of our request.

Thanks in advance for your anticipated cooperation.

Sincerely,

[HOMEOWNER]

Sample Short Sale Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Financial Hardship Letter will summarize our current financial situation, explain how we got here and support the request for a “short sale” of our home to avoid a foreclosure lawsuit with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and our resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household income has been significantly reduced. In fact, our income has been reduced from $____/month in 2010 to $_____/month currently. Although I hope to return to work as soon as possible, there’s nothing imminent and I have no real idea how long it will take. Until that time, we have little or no income and simply can’t continue to make loan payments.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and uncertainty as to when it will improve as well as the unavailability of equity based credit, we have no option but to work with you to sell the property for as close to the mortgage as possible. By agreeing to waive any resulting deficiency balance, which is not collectable anyway, you’ll make the transaction feasible for us and fair overall.

The alternative in light of our dire financial condition is a long and expensive foreclosure lawsuit for the bank with the same inability to collect any deficiency balance. Further, rather than disposing of excess inventory through a sale of our home, you’ll just end up with another property to maintain and eventually dispose of at a greater loss.

Please let us know if you need any additional financial information.

Sincerely,

(Homeowner)

Sample Loan Modification Cover Letter

Lender

Lenders Address

Re: Property Address/ Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. Accordingly, we are requesting a loan modification to lower our monthly payments and more accurately reflect the actual value of our home. At that time, we’ll be able to afford payments and our home will no longer be a losing investment.

To support the request for a loan modification, we’ve attached a financial hardship letter summarizing our overall economic condition and how we got there. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and amount of the underlying loan is much more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is through a loan modification. This option allows us to work together and stay in our home for years to come while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

Based on the underwater status of our mortgage, reducing the principal amount of our loan is the fairest way to reduce payments. If necessary, we can look at a combination of reducing the principal and adjusting the interest rate or length of the loan to facilitate reduced payments which is our immediate goal.

As you know, time is of the essence so please contact me as soon as possible to discuss available options and of course let us know if you need any additional information.

Thanks in advance for your anticipated cooperation.

Sincerely,

[HOMEOWNER]

Sample Loan Modification Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Hardship Letter will summarize our current financial situation, briefly explain how we got here and provide you with the information needed to properly review our request for a loan modification. Once approved, the loan modification will let us stay in our home and avoid a foreclosure process with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household finances have been greatly damaged. In fact, our income has been reduced from $____/month to $_____/month currently with expenses of $______/month.  Although I expect to return to work in the near future, we need assistance in the short term to keep payments on track and eventually resume normal operations.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and the unavailability of equity based credit, a loan modification is the only option that will allow us to remain in our home while at the same time protecting our financial future. By agreeing to a principal reduction that results in lower payments overall, you’ll help us survive this temporary setback while modifying the loan to more accurately reflect current property values and once again making home ownership a worthwhile investment.

The alternative in light of our difficult financial condition is a long and expensive foreclosure lawsuit for the bank with nothing to gain but more real estate to add to an already bloated inventory.  Add to that the costs of insurance, taxes and general maintenance and it’s pretty clear that a fair and reasonable loan modification is the best outcome for all involved.

Please let us know if you need any additional financial information and thank you for your time and consideration.

Sincerely,

(YOUR NAME)

Sample Deed in Lieu of Foreclosure Cover Letter

Bank

Address

Re: Property Address & Loan Number:

To Whom It May Concern:

We are the borrowers on the above-referenced loan. As a result of deteriorating economic conditions both personally and nationwide, we’ve been forced to dramatically alter our plans to avoid financial catastrophe. As a result, we have no option but to convey the property back to you using a Deed in Lieu of Foreclosure and need your approval to move forward.

To support our decision to execute a Deed in Lieu of Foreclosure in your favor, we’ve attached a “financial hardship” letter summarizing our overall economic condition and how we got here. We’ve also spoken with several realtors and conducted online research to determine the value of our home. Unfortunately, we’ve confirmed that our mortgage is significantly underwater and that the amount of the loan is far more than we could ever sell our home for.

In fact our loan is so far underwater that it will likely be years before it regains its prior value. [BRIEFLY EXPLAIN YOUR UNDERWATER MORTGAGE EVIDENCE HERE]

After evaluating all of our foreclosure alternatives, we’ve concluded that the only way to salvage and protect our financial future is to move on and return our home back to you. This option – including agreement to waive any resulting deficiency balance – allows us to work together and get on with our lives while avoiding the time and expense of a foreclosure lawsuit for the bank with little or nothing to gain.

As you know, time is of the essence so please contact me as soon as possible to confirm your approval or let us know if you need any additional information for the confirmation of our request.

Thanks in advance for your anticipated cooperation.

Sincerely,

[Your Name]

Sample Deed in Lieu of Foreclosure Hardship Letter

FINANCIAL HARDSHIP LETTER FOR LOAN NUMBER_____

This Financial Hardship Letter will summarize our current financial situation, explain how we got here and support the request to enter into a deed in lieu of foreclosure with the bank to avoid a foreclosure lawsuit with nothing to gain for either side.

Our present difficulties arise from a combination of two factors – recent job loss [or medical problems] and the deterioration of the housing market and our resulting underwater mortgage.

Because of my recent unemployment [or medical problems], our household income has been significantly reduced. In fact, our income has been reduced from $____/month in 2010 to $_____/month currently with monthly expenses exceeding $_______including the mortgage payment. Although I hope to return to work as soon as possible, there’s nothing imminent and I have no real idea how long it will take. Until that time, we have little or no income and simply can’t continue to make loan payments.

Further complicating matters, because we have an underwater mortgage typical relief avenues like opening a home equity line or getting a second mortgage are simply unavailable when there’s no equity in the home.

As a result of our reduced income and uncertainty as to when it will improve combined with the unavailability of equity based credit, we have no option but to convey our property back to you through a deed in lieu of foreclosure. By agreeing to waive any resulting deficiency balance, which is not collectable anyway, you’ll make the transaction feasible for us and avoid the need to simply walk away or declare bankruptcy to reach the same result.

The alternative in light of our dire financial condition is a long and expensive foreclosure lawsuit for the bank with the same inability to collect any deficiency balance. Both a decision to defend the lawsuit or file bankruptcy would greatly delay the process and increase your costs, as would simply walking away without working with you.

As you can see, a deed in lieu of foreclosure is clearly the best option for all involved as the bank gets the same result without cost and delay.

Please let us know if you need any additional financial information and thank you for your time and assistance.

Sincerely,

(Your Name)

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