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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?

As you have already applied for a loan modification, the lender will give you a new plan for repayment of your debts. So you will have to pay according to the new plan.

Posted on: 22nd Feb, 2009 09:57 pm
I am trying to get a loan but the bank wants me to write a letter to the underwriter explaining why I had a tax lien. Please help
Posted on: 24th Feb, 2009 12:54 pm
Welcome vina,

I would suggest you to contact an attorney who will help you in writing the letter and explaining the causes of tax lien to the lender.
Posted on: 24th Feb, 2009 09:45 pm
We have two mortgages. Our first is with CitiMortgage with a balance of $161,048.00 at 5.25% and a 30 year fixed. We have a forebearance plan that we pay 1,582.00/month until August. Our second is with Countrywide with a balance $146,000.00 at 8.375% interest only 25 year ARM. We pay 1,020.00/month on this. I would estimate the value of our 987 sq.ft. home to be $200,000.00. We are trying to decide if we should keep struggling to make payments on a home we have outgrown and that will not come up in value for many years to come or try to do a short sale or go into foreclosure. We bring home $2,600.00 every two weeks after taxes and insurance. We think we make too much to qualify for a loan modification that would give us the incentive and ability to stay in our home.

Do you think our mortgage companies would lower our loan balances if we make $90,000/year? Do they look at what you bring home or gross income? Should we try to stay in home that is too small with three children and worth over $100,000.00 less than we owe to keep our credit. How long is our credit affected after having a foreclosure or short sale?
I appreciate any help you can be on this difficult financial and moral decision we have to make.
Posted on: 25th Feb, 2009 01:20 pm
Hi Rocky,

I can understand that you are going through a tough situation. However, you should note that the lender will not accept your request for a short sale until you are delinquent in your payments.

As far as foreclosure is concerned, I think that a short sale is a better option than foreclosure. A foreclosure will reduce your credit score by 250 points whereas a short sale will reduce your payments by 75-100 points. Moreover a foreclosure will also stay in your credit report for 7 years.

Mortgage companies cannot directly lower your mortgage balance. You can apply for a loan modification and check if you can qualify for it or not. This will help you in saving your property. However, if you can afford to lose the property, then you can go for a short sale or a deed in lieu.

Posted on: 25th Feb, 2009 11:16 pm
I need to write a letter to my mortgae company for a work out plain. I need to explain the difficulties and circumstatces that caused us to fall behind on our payments. I need to know what I sould put in this letter. I am not good at this kind of thing.
Posted on: 01st Mar, 2009 07:48 am
Hi tkraus,

You will have to write a hardship letter to the lender explaining your difficulties to him. To know more about how to write a hardship letter, check out the given link:
Posted on: 01st Mar, 2009 09:14 pm
i need to see sampe letters
Posted on: 17th Mar, 2009 04:50 pm
Hi debra,

To view a sample Hardship Letter, you can refer to the page mentioned below:


Posted on: 18th Mar, 2009 05:24 am
It seems to me that Chase Manhatten are guilty of extreme ignorence...kind of like an ostrich that buries it's head in the sand! How can they just ignore their customers they way they do? I have repeatedly tried to talk to someone to adjust my arm to a fixed ...I pay on time and they tell me NO because my equity is now upside down due to this economy! How can they be so HEARTLESS??? What can I do to get my rate fixed??
Posted on: 23rd Mar, 2009 08:19 am
i have been behind on my mortgage since nov 08, i am now schdule to go to mediation next week my lenders has been very difficult to begin with i did every thing right i am with the urban league forclosure prevention since dec08, and did all that is required of me but i havent gotten any real answers of what is to happen in the mediation meeting my lender is aurora loan services that is a part of lehman brothers they are very difficult on saturday i recieved a phone call from them to make out a payment plan and they are still telling me that i am delinquent by $700 and when i mentioned that they are in correspondent with the urban league they told me thay there is nothing in the records in regards to the urban league how do i go on from here
Posted on: 23rd Mar, 2009 11:37 am
Hi Frustrated,

I think you should write a hardship letter to the lender stating the difficulty you are facing under current situation and why you desperately want to get the rate fixed. You should also state that if the situation doesn't change, you may not be able to be current on the loan any more. This I think will be more effective in convincing the lender.


Posted on: 24th Mar, 2009 05:33 am
Hi marley,

If you are with urban league forclosure prevention since dec08 and they have been negotiating with the lender to work out a plan, there should have been some records with the lender regarding this. However, I think you need to talk with urban league in this regard as they will be in a better position to help you.


Posted on: 24th Mar, 2009 05:42 am
I lost my house, one part time job, and are left with one part time job to pay over 60,000.00 in debt with. How do I write a letter to the doctor's, hospital's, and credit cards to lower my debt
Posted on: 24th Mar, 2009 10:58 am
Hi deann,

You can write a hardship letter to them explaining your current situation and why you want them to lower your debts. But you will have to convince them that you will be able to make payments once the debts and and the payments are lowered. To view a sample hardship letter you can refer to the page mentioned below:


Posted on: 25th Mar, 2009 04:04 am
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