Sample Hardship Letter

With the current economic climate, more and more families are finding themselves having difficulty making ends meet. As a result, many are facing foreclosure, one way to avoid foreclosure is a home loan modification.  Refinancing used to be the homeowner's answer to financial difficulties, but now many who would have been able to refinance can no longer qualify.  For this growing number of individuals, home loan modifications can save their homes from foreclosure.

A hardship letter is a letter to your home mortgage lender explaining the circumstances that led to you becoming delinquent on your loan.  In order to be given a home loan modification, you will have to submit a hardship letter along with other documentation. The hardship letter will provide an explanantion of why you fell behind, what you plan to do to remedy the situation, and evidence that you will be able to stay current on your loan from this point on.

This is a list of common hardships.  It is not exhaustive, but does provide a well rounded sample of possible causes you can use in your hardship letter.

• Job relocation
• Unemployment
• Reduction of income
• Divorce or separation
• Payment increase on Adjustable Rate Mortgage
• Medical bills or prolonged illness
• Death of the mortgagor
• Death of spouse or family member
• Failure of a business
• Military service
• Incarceration
• Problems with the property
• Inability to sell
• Inability to rent
• Victim of fraud
• Payment dispute
  

Your hardship letter should contain the following:

• Your loan number
• Deliquency status of your loan
• Description of your payment history before deliquency
  
• Main hardhip that caused you to become delinquent
• Secondary hardships contributing to your delinquency
• Details proving you will be able to keep current in the future
  

Bank name

Bank Address

Sate

Your Name

Your address

State

Date

Loan Number:

Re: Mortgage Modification

To Whom It May Concern:

Due to the recent adjustment in my mortgage, I'm finding it very difficult to afford my new payment. I currently have a (fill in year) adjustable rate mortgage which is scheduled to adjust again on (fill in date). At my current income, I will not be able to afford the increased payments when the mortgage adjusts. I would like to avoid default or foreclosure on my home and hope that we can work together to reach this end.

One thing that would help is to have my current adjustable rate mortgage converted to a fixed rate. I am willing to discuss any other options you may have to suggest. Over the past (fill in) years of my mortgage I have consistently been on time with my payments and I would like to be able to stay current.

I had hoped to be able to refinance in order to lower my monthly payment, but with the current downward trend in the housing market, I am not able to meet the refinancing guidelines. One of the factors leading to my ineligibility for refinancing is the fact that my house is worth (enter %) less than when I purchased it. I believe that Fannie Mae Announcement #06-18 (Oct. 4th 2006) regarding the servicing of Conventional Mortgage Modifications. applies to my situation. I have included recent paystubs, (list any other documentation you are including with the letter), and W-2s for the past two years. Please let me know if you require any other documentation and I will provide it as soon as possible.

Thank you for your time and consideration.

Yours truly,

Your Name

Your hardship letter should be simply stated and straight forward.  Be honest about the details of what has gotten you into your current situation.  Do not fall into the mistake of blaming the bank for what has happened.  Remember that a person, not a faceless corporation, is reading your letter and is likely to empathize with your situation if you are honest and candid about it.  As long as there is communication, there is hope.