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How to Write the Mortgage Hardship Letter

Writing the ‘Hardship Letter’

One of the items your Bank or  lender will  require  from you  during the loan modification process is a hardship letter. A hardship letter is typically a written reason as to what  happened that  has caused you to fall behind on your mortgage and it is a key item  in helping you stop foreclosure or modify your mortgage agreement.

This letter acts much like an outline or biography of your current issues that are affecting your ability to meet your financial obligations, and by this we mean not being able to afford your mortgage.  Lenders do look for what is known as a hardship letter when a borrower applies for a loan modification. Such a letter is a requirement for modification applications under the government’s Making Home Affordable program.

A hardship letter is not the basis for modification approval that depends on the borrower’s financial situation and the red tape of the various government and Bank programs. Rather, the

purpose of the hardship letter is to explain upfront, in simple language, why borrowers missed payments, and what they propose as a solution.

less is more when it comes to writing a hardship letter,giving them exactly what they need and nothing more

The lenders’ loss mitigators, faced with mountains of modification requests, are unlikely to spend time reading more than the first few lines of each letter.

And there is always the risk that borrowers who go on at length could unknowingly trip themselves up with unnecessary details that raise red flags for a mitigator.

When the housing bubble burst, home values dropped, and millions of homeowners who did the right and responsible thing—shopped for a home, secured a mortgage, and made their payments on time each month—were left with houses worth less than they paid for them and mortgages worth more than their homes. Today, many of these homeowners are locked out of refinancing because they are underwater.

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