In the process of negotiating with banks many of our customers feel various things, like intimidation, fear, confusion and anger. In trying to get a lender to give a simple and straight forward response we find that it helps to use a certain language or nomenclature in letters and replies.
The simple truth is that they tend to exert authority if you give them this authority, but if you give them the authority with the express requirement that it forces them to make a painful decision should they act upon it. The letter below is a sample that we have used with a few people who have investment properties and it seems to get a decent result.
Don’t use it until such time as you have filled in your Standard Financial Statement (SFS), the end result you are looking for with a letter like this is to get the lender to accept your rent as full settlement of your account until such time as you can get back on your feet, or if they want to move in on you to take a loss.
Loan Account Number – xxx xxx xxxx
Security Address – (address of mortgaged property)
I am writing to you in response to the letter I received from you dated (recent correspondence date) in relation to the above mortgage account which, unfortunately, is currently in arrears.
I would just like to give you some background information as to the reason behind the current difficulties in making full capital & interest repayments on the mortgage.
(enter a few lines about your personal situation here)
** below is a made up example**
Both myself and my wife were made redundant in 2010. Since then we have been finding it hard to make ends meet. We have four young children. As my background was in construction I don’t have any near term prospects. I am currently retraining and getting dole payments which just about keeps our head above water.