Imminent Forclosure of Primary Residence

[DTH]

How restrictive should a 457 plan be for granting a hardship withdrawal for imminent foreclosure on a participant's primary residence. Would a default letter from a mortgage company or bank threatening foreclosure proceedings will begin by a certain date if the mortgage is not brought from arrears be enough to grant a hardship or would foreclosure proceedings actually need to begin?

I have noticed that when the bank actually begins foreclosure proceedings it goes to an attorney and the participant incurs substantially more debt to pay for attorney fees and other expenses to begin the public sale of the home.

Thanks.

[namealreadyinuse]

Does the plan require "immediate and heavy" need? You should require representations from the participant that match the plan's requirements in addition to just documentation of the need.

[DTH]

Generally, the plan document says that a distribution for an unforeseeable emergency may be in an amount reasonably needed to meet the financial need created by such unforeseeable emergency.