Step 2 - Create your hardship letter
Step 3 - Apply for loan modification
What is a hardship letter?
A hardship letter is a written detail on what grounds have set you to become delinquent on your mortgage and is essential in helping you prevent the foreclosure. It describes your current situation that affects your ability to meet your financial obligations.
Always keep in mind that you are composing the hardship letter for your creditor or service provider. You do not need to tell story about your life situation. Just inform them truthfully about the hardship you have been encounter that causes you to miss deadlines of your payments.
In writing hardship letter, make certain that it is short and straight to the point. Much elaboration might loss the interest of the reader and may cause most likely to reject your proposal.
Common reasons why you need to write a hardship letter
1. You are struggling with high mortgage payments and you may be looking for a loan modification.One item that the creditor requires is a hardship letter.
2. You need to short sale your house because you can no longer afford to pay the amortization because of the hardship you are currently experiencing. In order to approve your proposal you need to write a hardship letter.
3. Your house is recommended for foreclosure but you can’t afford to lose your home . You have to write a hardship letter to your lender and apply for a loan modification.Your Hardship Letter must be credible and believable.
Sample of hardships that are considerable to the creditors
Adjustable Rates Mortgage Reset Payments
Serious Health Problem
Reduced Income (for business)
Failed Business (bankruptcy)
Death of Spouse
Damage to Property (natural or unnatural disaster)
Tips on How to Write A Credible Hardship Letter
1. Think about the current hardship your experiencing .
2. You have to write down all of the valid reasons why you can no longer afford to pay your mortgage.
3. Analyze all the possibilities that causes your hardship.
4. Choose the the most weighted reasons that affects most of your prevailing financial situation.
5. Make an outline of all important matters the you should write on your hardship letter.
6. Now you are ready to write your hardship letter.Keep in mind that you are writing a business letter too.
7. Please keep it short.Although the content of your letter is all about your current situation, you don’t need to tell all your life story. it must be brief, logical and comprehensive.
Below is a sample of a hardship letter
Lenders’ name:(borrowers’ lender name)
Loan number:(borrowers loan number)
This letter is intended to explain my current financial situation which causes me to become delinquent in paying my mortgage.The main reason of my delinquency is that I lost my job due to retrenchment. The company where I am working had experience market drop down that forced them to retrench some employees and i was one being hit by the circumstances.I tried every possible measures like venturing into a business of little bakeshop using my little savings but its’ income is not enough to finance all of my payable and our daily expenses.
Honestly,I have no intention of getting away from my obligations because I want to maintain a good reputation in your bank. But my current hardship situation have made me delinquent in paying my monthly amortization and might stop to paying you for the meantime.I can’t afford to lose our home because its all that I got. So I am asking for your leniency. I believe that my situation is just temporary and by the time I recover from this misfortune I will be able to pay my mortgage from your bank.
Borrowers name and signature