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Many of our clients are receiving these days a Hardship Affidavit that seems like it is causing a storm of confusion. Even those in the industry find that they are not exactly sure what it is for. The “Affidavit” pronounced by many as ‘affidavid’ is basically a formal hardship letter to the lender advising them what the reason is for the application for assistance. It can also be considered to be a sworn statement of fact from which the lender will draw its final conclusions if it can help a homeowner or not.

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Having insider knowledge of that very system we know that these letters are crucial in the application process. It is very important for many to understand that they have to not get involved with explaining the details as it is to be an overall summarization letter of the situation. In an item that seems to be so inconsequential it has the potential to make a huge difference and that is why it is important that homeowners seek assistance from professionals. When you go to court you can protect yourself and act as your own counsel but that doesn’t mean that we go out and represent ourselves in court. The same thing goes for this. Imagine that the changes made at this time are the ones that may continue to affect the homeowner for the 30 years of the loan or whatever the remaining term is.

One of the most important examples that we can draw from is in our experience with Bank of America (BAC Home Loan Servicing, LP) where they were requesting that the possibility of a deficiency on the first mortgage be kept and a 20,000 note to be taken from the second mortgage. With a couple of adjustments  a few calls and the case presented the right way the homeowner walked with NO Note and NO Deficiency from the first mortgage. If you are finding that your lender isn’t working with you we suggest that you get a second opinion from another professional organization that is in the business of helping homeowners out of problems.

If you have any questions or concerns we request that you participate in the postings below and put up your questions. We know that if you are having the question that one of the possible Hundreds of visitors will have the exact same questions.

If you are concerned about posting information online and would like to directly contact someone please feel free to reach us at 888-934-3444.

This is what you will find on most Hardship Affidavit for applying to the HAMP program:

Hardship Affidavit RMA

There is a statement where the homeowner specifically agrees that they are asking for help:

I (We) am/are requesting review under the Making Home Affordable Program.
I am having difficulty making my monthly payment because of financial difficulties created by (then there are boxes you check if they apply).
The Questions/statements are as follows.
My household income has been reduced.
For example: unemployment, underemployment, reduced pay or hours, decline in business earnings, death, disability or divorce of a borrower or co-borrower.
My monthly debt payments are excessive and I am overextended with my creditors. Debt includes credit cards, home equity or other debt.
My expenses have increased.
For example: monthly mortgage payment reset, high medical or health care costs, uninsured losses, increased utilities or property taxes.
My cash reserves, including all liquid assets, are insufficient to maintain my current mortgage payment and cover basic living expenses at the same time.
Other: (This is another section where the homeowner can document if necessary what other type of hardship they have been affected by.)
This is a section that is expressly to add the details pertinent to their situation.
Those items that do not fit are suggest to be put in on one of the later pages.
(This is followed by a section used to document the financial income and out go for the homeowner)
Include combined income and expenses from the borrower and co-borrower (if any).
If you include income and expenses from a household member who is not a borrower, please specify using the back of this form if necessary.
You are not required to disclose Child Support, Alimony or Separation Maintenance income, unless you choose to have it considered by your servicer.


There is a section that follows that is requested but is not necessary to be filled out and it is mainly like a short hand census that states:

The following information is requested by the federal government in order to monitor compliance with federal statutes that prohibit discrimination in housing. You are not required to furnish this information, but are encouraged to do so. The law provides that a lender or servicer may not discriminate either on the basis of this information, or on whether you choose to furnish it. If you furnish the information, please provide both ethnicity and race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, the lender or servicer is required to note the information on the basis of visual observation or surname if you have made this request for a loan modification in person. If you do not wish to furnish the information, please check the box below.

Finally at the bottom you will find a series of questions and recitals that you must agree to in order to have your file reviewed. In most cases it really only advises you to be truthful as it could come back to bite you:

1. That all of the information in this document is truthful and the event(s) identified on page 1 is/are the reason that I need to request a modification of the terms of my mortgage loan, short sale or deed-in-lieu of foreclosure.
2. I understand that the Servicer, the U.S. Department of the Treasury, or their agents may investigate the accuracy of my statements and may require me to provide supporting documentation. I also understand that knowingly submitting false information may violate Federal law.

3. I understand the Servicer will pull a current credit report on all borrowers obligated on the Note.

4. I understand that if I have intentionally defaulted on my existing mortgage, engaged in fraud or misrepresented any fact(s) in connection with this document, the Servicer may cancel any Agreement under Making Home Affordable and may pursue foreclosure on my home.

5. That: my property is owner-occupied; I intend to reside in this property for the next twelve months; I have not received a condemnation notice; and there has been no change in the ownership of the Property since I signed the documents for the mortgage that I want to modify.

6. I am willing to provide all requested documents and to respond to all Servicer questions in a timely manner.

7. I understand that the Servicer will use the information in this document to evaluate my eligibility for a loan modification or short sale or deed-in-lieu of foreclosure, but the Servicer is not obligated to offer me assistance based solely on the statements in this document.

8. I am willing to commit to credit counseling if it is determined that my financial hardship is related to excessive debt.

9. I understand that the Servicer will collect and record personal information, including, but not limited to, my name, address, telephone number, social security number, credit score, income, payment history, government monitoring information, and information about account balances and activity. I understand and consent to the disclosure of my personal information and the terms of any Making Home Affordable Agreement by Servicer to (a) the U.S. Department of the Treasury, (b) Fannie Mae and Freddie Mac in connection with their responsibilities under the Homeowner Affordability and Stability Plan; (c) any investor, insurer, guarantor or servicer that owns, insures, guarantees or services my first lien or subordinate lien (if applicable) mortgage loan(s); (d) companies that perform support services in conjunction with Making Home Affordable; and (e) any HUD-certified housing counselor.

Be advised that by signing this document you understand that any documents and information you submit to your servicer in connection with the Making Home Affordable Program are under penalty of perjury. Any misstatement of material fact made in the completion of these documents including but not limited to misstatement regarding your occupancy in your home, hardship circumstances, and/or income, expenses, or assets will subject you to potential criminal investigation and prosecution for the following crimes: perjury, false statements, mail fraud, and wire fraud. The information contained in these documents is subject to examination and verification. Any potential misrepresentation will be referred to the appropriate law enforcement authority for investigation and prosecution. By signing this document you certify, represent and agree that:
“Under penalty of perjury, all documents and information I have provided to Lender in connection with the Making Home Affordable Program, including the documents and information regarding my eligibility for the program, are true and correct.”

If you are aware of fraud, waste, abuse, mismanagement or misrepresentations affiliated with the Troubled Asset Relief Program, please contact the SIGTARP Hotline by calling 1-877-SIG-2009 (toll-free), 202-622-4559 (fax), or www.sigtarp.gov. Mail can be sent to Hotline Office of the Special Inspector General for Troubled Asset Relief Program, 1801 L St. NW, Washington, DC 20220.

The entire HAMP Loan Modification process can take many months so remember to be patient as there are an estimate 12 Million people that will be affected by foreclosures in 2010.