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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?
I've called my mortgage company and asked for a hardship for the future. I'm never late on my payments but now, it seems that I will not be able to pay my April payment. So, is that mean they will look at it differently?
Posted on: 02nd Apr, 2009 06:51 pm
Hi Bo!

Welcome to forums!

It would depend upon the lender. As you have informed them about your hardship, they may look into your financial situation and decide whether you would be able to pay off the dues or not. If the lender is convinced that you won't be able to pay the mortgage dues at any cost, then he may offer you loan modification.

Feel free to ask if you have further queries.

Posted on: 02nd Apr, 2009 09:39 pm
Hello, I'm in the process of having to write an hardship letter. My concern is that when my mortgage started to fall behind I was going through a divorce. Since the divorce I've since remarried. My current wife hasn't been of much help concerning my mortgage. I've also changed jobs and of course the pay is lower. My question is how do keep the focus of the loan modification department on my income insead of both?
Posted on: 14th Apr, 2009 11:49 am
hi george,

in order to convince the loss mitigation department of the lender, you will have to state your financial situation in details. you can even provide documents in support of your statements. to know more about how to write a hardship letter, check out the following link:
Posted on: 14th Apr, 2009 11:56 pm
When i am drafting a letter in a word document what should be subject if i have not received the payment...?
Posted on: 17th May, 2009 10:56 pm
Hi Sri

Your query has been replied in the given link:

Please take a look. I hope it will help you.

Posted on: 18th May, 2009 01:51 am
due to loss of income 2 years ago, our second mortgage company foreclosed on our property. now 2 years later i was served with foreclosure summons on the same house because apparently the 2nd mortgage company did not communicate with primary lender. the original loan is still under our name , tax records are under our name , andwarranty deed all except title which was signed by an asset management. they have stopped paying the house and primary lender has located us in another state and served us with a summons with the intent to foreclose said property. now cani salvage my home again ????
Posted on: 25th May, 2009 06:52 pm
Hi Rose,

Your query has been answered in the given page:

Please take a look. I hope it'll help you.

Posted on: 26th May, 2009 12:38 am
over the course of this recession I have lost approximately 36% of my income due to lost working hours that was strictly overtime pay. My family and I have lived in the same house and never been late on our mortgage. We managed to pay off some credit cards this year by selling off all possible savings bonds and pulling everything but $500.00 aout of our savings but now we find ourselves using the credit cards again for everyday expenses. We don't eat out and have cancelled our home phone due to having cell phones that were cheaper. Will a loan remod possibly help us? We have Chase. Thanks, Mike
Posted on: 14th Sep, 2009 08:13 pm
Hi krewkabkidz,

Loan modification can help you in making your loan payments more affordable. Once the loan payments are affordable it would be easier for you to pay off the dues. You can apply for a loan modification with your current lender and check out if he accepts your request or not.

Posted on: 15th Sep, 2009 12:33 am
I am reading above and it says the lender may accept a hardship letter for marital separation but then it also says under types of harship letters that may not be accpeted "going through a divorce" -

I have not yet filed for a divorce as my husband left the home 4 months ago and is not helping me with any of the bills. At this a point I dont know what to do.
[E-mail address deleted as per forum rules. Thanks.]
Posted on: 11th Oct, 2009 08:56 pm
If you are the co-borrower of a mortgage and facing problems to pay it off, then you can inform the lender about it. Depending upon your situation, the lender may offer you a loan modification.
Posted on: 13th Oct, 2009 01:28 am
If you are the Co-Borrower and you cannot get the Borrower to sign the Loan Modification papers can you still get approved for the loan.
Posted on: 10th Feb, 2010 06:58 am
Hi terry,

If there are two borrowers for a mortgage, then both the borrowers will have to sign the documents for modification of your loan. If that does not happen, then the lender will not be ready to give you a modification.

Posted on: 10th Feb, 2010 11:19 pm
Can you file for bankrupcy while modifying a loan if you want to keep the house?
Posted on: 23rd Mar, 2010 04:58 am
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