How to Write a Hardship Letter

by mrmontoya | March 21, 2017 | , , |

Hardship Letter

A hardship letter is a letter of explanation to your lender as to why you are unable to meet your financial obligation on a monthly basis.  This letter is a necessary document in the process of applying for a loan modification or a short sale.  The lender needs to know what has caused your hardship.  This is your opportunity to share your struggle.  This process may feel as though you will be too vulnerable or embarrassed, but remember you are not alone. So many households across America are experiencing the same difficulties.  By beginning the process with your hardship letter, you are taking back some control and are taking steps to stay in your home that you and your family cherish.

How Do I Write a Hardship Letter?

When beginning to write your hardship letter, keep in mind a few key points the lender is looking for:

What happened that caused your monthly mortgage payment to be unaffordable?

  • When did this hardship begin? Providing dates are helpful.
  • What solutions have you tried to relieve your current situation?
  • Why are these solutions not resolving your current situation?
  • Do you want to stay in your home?
  • Can you afford a monthly payment? And if you can, how much can you afford?

After you have considered these three questions, be honest with yourself and with your lender.  One of our core values is to be transparent and honest in every step of the way in this process with you.  It is okay to be this way with your lender when applying for a loan modification or short sale.  Remember, you are looking for the best possible outcome for you and your family.  You want to stay in your home and you want the lender to know you would like their assistance to do so.

Financial Hardships to Consider

There are many common reasons a hardship can occur.  The most common reasons are:

  • Loss of income due to loss of employment or loss of hours at work
  • Relocation for work
  • Divorce
  • Dependents in the household increase (newborn, relative, etc.)
  • Failed business
  • Death of a spouse, family member or co-borrower
  • Adjustable rate mortgage
  • Medical expenses/Illness
  • Military Service
  • Incarceration

You may have a combination of these reasons or you may have a reason that is not on this list.  That is what we are here for, to help you sort out your reasons to share with your lender as to why you should qualify for a loan modification or short sale.

Sample Letter

Your hardship letter should be around one page in length and cover what you are seeking, why you are seeking and that you intend to pay your debt, but need assistance to do so.  You should also include your loan number, names and property address:

Dear Lender,

I am writing you today to request a loan modification, as our payment has become a burden that we cannot afford.  We want to share with you our circumstances that have caused us to struggle to meet our financial obligations:

Lie out your reasons and include dates as to when the difficulties began.  Remember to include all circumstances while being honest and straight to the point.  Be specific if you have numbers to share. Let them know what you have tried to solve this on your own, but it’s just not making ends meet.

We are seeking relief and ask for a loan modification to do so.  We intend to pay our debt in full but need some assistance in the meantime to get back on our feet.  I hope that we can come to an agreement for a loan modification.

Home Equality Loan Program (H.E.L.P.)

Remember, you are not alone.  All is not lost; there is help, hope and solutions.  There are options available to you and we want to help you explore them to find the best outcome for you and your family.  If you would like to discuss your options, please give us a call at 949-413-7911 or contact us.