A hardship letter is a letter that you send to your mortgage company to let them know that your life circumstances have changed and have changed enough to make it difficult or impossible to make your mortgage payment.

If the hardship letter is done right, it can sometimes help and individual to avoid foreclosure and can sometimes help them to skip some mortgage payments while they get their finances figured out and back on track.

If you're going to attempt this, you will want to make sure that you learn how to write a hardship letter in the correct manner. If your bank thinks that you're lying or you act suspiscioulsly, it most definitely will not work.

• The first thing you'll want to keep in mind is that is that everything you put in the hardship letter has to be truthful. The bank will most likely do its due diligence and you'll want to make sure that you're very careful to tell the truth.
• You will need to have a legitimate reason for delaying/suspending your mortgage payments. In other words you're going to need to have a legitimate health situation, employment situation, or some other extenuating factor that will keep you from making your payment.
• You're going to want to use words that help the person that reads the letter to know that you are legimiately scared and worried about the situation. If you can get them to feel for your situation it definitely wont' hurt.
• Tell them exactly when said event happened. Tell them why this messed up your ability to pay.
• Explain that you have a plan that will help you to get out of the current situation, i.e. let them know that you have a job lined up or that you are interviewing for jobs or tell them that you're raising money to help with your/your family member's health crisis.
• Give them an offer - for example tell them that if they can suspend your payments for three months you should start your new job and will be able to make your payments.
• Tell them that you're grateful for their consideration and that you would be happy to come in for an interview if that would help them to get a better feel for the situation.
• Keep in mind that you don't 'deserve' to have the terms of your loan modified. You signed on the bottom line and you don't deserve anything. You need to show the bank/lender that it's in their best interest to modify the loan and that you are going to make sure that long term it works for them.
• Tell the lender exactly how much of a payment you're going to be able to handle. If they understand up front exactly what you need, they'll be more likely to come to a conclusion that might work for you.
  

• An illness/medical bills or an severely expensive illness of a person in the family.
• Reduction of income/loss of job
• Death of spouse
• Property damage
• Payment increases - common for interest only and variable rate loans
• Failure/problems with a business that you own