Compare Mortgage Quotes

Refinance Rates for Today

Please enable JavaScript for the best experience.

In the mean time, check out our refinance rates!

Company Loan Type APR Est. Pmt.

Hardship letter: What is it and how to write it?

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 12th Feb, 2008 11:07am
If you've fallen behind on your mortgage and need a workout from the lender, you should send them a hardship letter. A financial hardship letter is a letter that explains why you're in default, what you have done in order to correct the default, and the workout plan you are interested in.

What a hardship letter should include ...

If you are trying to get a workout from your lender, you should include the following in your hardship letter:
  1. Your contact information including your name, address, and account number.
  2. Mention what kind of hardship you're experiencing and the possible reasons for it.
  3. State when the hardship began.
  4. Give a brief overview of your income and expenses. Tell the lender that you're
    expecting a change in your income. Also inform the lender about any money you have saved to compensate for the default.
  5. Give a brief explanation of the workout plan you are interested in and state the reasons why you think it may work for you.
  6. Include how your credit counselor (if you have one to help you negotiate) can be contacted.

Apart from the above, while writing a real estate hardship letter you should provide a statement of your income, expenses, and financial statements to prove your
assets and liabilities. The type of information you should include are tax returns for the previous years, current pay stubs, etc. If you're trying to sell your home then you'll have to provide a copy of the realtor agreement along with the hardship letter. To get an idea how to write such a letter, check out a sample hardship letter.

Types of hardship that the lender may accept...

Here's a list of reasons why your hardship letter may be accepted by lenders.
  1. Loss of employment
  2. Medical problems that prevented you from working
  3. Reduction in salary
  4. You may be a single parent with a low income and you are not receiving child support
  5. You're a victim of some disaster
  6. Death of spouse or co-borrower
  7. Marital separation or divorce

Types of hardship lenders may not accept...

Your hardship letter may be rejected due to the following reasons:
  1. You're a student and cannot pay off the mortgage
  2. You're going through a divorce
  3. Your spouse has threatened to file bankruptcy

Usually mortgage lenders won't consider a workout plan such as forbearance, loan modification, short sale or foreclosure or a short sale without a proper explanation of your hardship. So, while writing a real estate hardship letter, you should provide a factual explanation of your financial situation. The hardship letter shouldn't criticize the lender or any other party involved in the mortgage transaction. It should simply state why you cannot follow the terms of the mortgage agreement along with a request for a workout plan.
Posted on: 12th Feb, 2008 11:07 am
my mortgage is with chase and i have ask for a loan mdification. i have to submitt a hardship letter and i need help writing it. i can not afford the payment as it is because of health problems. my income is much lower now and i am on disability. i can't refinance because i don't qualify. i am not currently latebut i don't know if i can make march's payment. they told me to continue to "make the payments" and that this could take up to 90 days. i don't know how i am going to make the payments and i don't want to be late. what do i need to include to make sure this letter gets me the rate reduction that i need?
I was successful in getting my first mtg. modified, and have been paying it religiously. The balance is $223; house value is $190-200k. I have a second mtg. w/a balance of $25k, and an interest rate of 14%. I have tried on four occasions to get it modified, and have been turned down each time for completely contradictory reasons. I am on a fixed, disability income - first, I was told to get my first modified; 2, I didn't make enough; 3. I made too much. The last time, I was told that the second would buy the first ($223), then foreclose on me for both the first and the second.

I give up. My credit is ruined (I'm 2 months behind on the 2nd); I have lost $60k in equity, and no foreclosure is going to realize enough from a sale to cover their balances. I'm considering just giving a DIL to both; I'm over 60, will never buy another home, and couldn't maintain it if I did. Any suggestions? The second is very busy threatening vs. giving viable options.
Posted on: 09th Nov, 2008 11:52 am
Hi pamt,

DIL will be good option for you. In this process, the lender will sell your house and try to recover his debts. In case, if there is a deficiency, there are chances that the lender will forgive it. To know more about deed in lieu, have a look at the given link:

You have mentioned that the lender has given you contradictory reasons for not doing a loan modification. I think you can even take the advice of a mortgage attorney and see what can be done.


Posted on: 10th Nov, 2008 01:38 am
My mother is 71 yrs olf and has been handicapped in a electric wc for the last 18 yrs ,she fell in water from a overflowed toilet in the br of her office complex and had a spinal fusion gone bad that left her handicapped. She has been able to live a independent life and lives in a one br condo(convertted from an apt complex) for the last 4 years. Recently she has started to deteriorate health wise, she has had numerous bouts of pnemonia and has been placed on oxygen 24/7. We as a family along with her(she mentally remains sharp as a tack!) have decided she needs to be in an independent living/assisted living enviroment , but her monthly income from SS and her annuity(set up after her injury) is $2600 a month and the assist lvg is $2100 a month,her medication are at times $400 a month...........Ok now for my question we are looking into dlf as an option instead of foreclosure but we want to make sure the mtg co cannot take her annuity or ss income (which are her only income ) Also she has a modified van with a lift shat she clicks her wc in to go to Dr, groc ect we don't want them to try and take that too.How can we avoid this? She has not been late on pmts yet but we will be moving her to new place at the end of month so at that pt we will not be able to make pmts.Thanks and sorry this was so longwinded.....mindy
Posted on: 11th Nov, 2008 07:13 am
Hi Mindyloving daughter!

Have your deed in lieu foreclosure been accepted by the lender? Did you inform the lender about the whole issue through a hardship letter?

As far as I know, liens cannot be placed on the social security income or her annuity. Moreover, as its a deed in lieu foreclosure, the lender will normally forgive the deficiency.


Posted on: 12th Nov, 2008 01:52 am
We have not even sent a hardship letter yet as we are just moving her out next wkend and she has not been late on any pmts yet , but because she will be in the asst lvg in dec we will not be able make any more pmts on condo. We were also told that the mtg co will not even talk to us about until she is deliquent on the mtg. Thanks Mindy
Posted on: 12th Nov, 2008 05:43 pm
Hi Mindyloving daughter!

Yes, it is correct that the lender will not generally speak about a loan modification or any other plan until they default on payments. However, you may try speaking to them as sometimes they may consider certain situations. You will have to explain her situation to the lender properly and I hope they will agree.

Posted on: 13th Nov, 2008 02:04 am
My husband and I just wrote a hardship letter to CHASE and within one week we recevied a response. We wrote everything we could. We followed all the guidelines and we were rejected. What do we do now? We haven't been late on a payment, but now we are about to be. I feel like we've tried everything. Any suggestions?
Posted on: 05th Jan, 2009 01:21 pm
Hi mmdw,

Did you apply for a loan modification or a deed in lieu? Lenders do not offer the options of loan modification, short sale or a deed in lieu unless you have been delinquent on your payments. As you were not late on payments so the lender may have rejected the hardship letter. In my opinion, you should once again speak to the lender and inform them about the problem that you are facing. You should also tell them that you may get delinquent in the near future. May be they will help you.

Posted on: 05th Jan, 2009 11:21 pm
We have our first with CITIMORTGAGE and second with has been a nightmare working with both companies trying to get loan modified or any help. CITIBANK will not even talk to you UNLESS you are currently delinquent. So for those of us making our payment but coming to a point where we won't be able to, there is no help. All their advertising is a joke!!
Posted on: 10th Jan, 2009 12:10 pm
Hi Guest,

Yes, its correct that lenders won't help you with a short sale, loan modification or a deed in lieu if you are not delinquent on payments. However, you may try negotiating with them so that they are convinced that you are facing serious hardship. Thus, they may agree to give you a loan modification.

Posted on: 12th Jan, 2009 10:51 pm
will your lender still want to help modify your loan if you have already filed bankruptcy?
Posted on: 18th Jan, 2009 04:24 pm
Hi flatbuttbroke!

Welcome to forums!

It will be totally the discretion of the lender to modify the loan. You will have to speak to the lender regarding loan modification and try to convince him.

Feel free to ask if you have further queries.

Posted on: 18th Jan, 2009 10:24 pm
Can my mortgage co come after me legally after a foreclosure if I have already tried and failed to get my loan modified?
Posted on: 11th Feb, 2009 01:32 pm
Hey shalsha,

I did not understand your question completely. If your mortgage company has foreclosed the property, then they can definitely come after you for the deficient amount resulting from the sale of the property.
Posted on: 13th Feb, 2009 10:44 pm
i'm two months behind on my mtg and am in loss mitigation i.e. loan modification. next month i think i should be able to make my payment. should i start back paying as usual while in mitigation?
Posted on: 22nd Feb, 2009 02:06 pm
Page loaded in 0.146 seconds.