What Should You Include in a Hardship Letter?

A hardship letter is a letter written to your lender detailing the reasons you cannot continue making mortgage payments. While the premise appears simple, the writing and tone of the letter should not be. This is often the only document that can persuade your lender into stopping the foreclosure process. The following serves as an outline, by paragraph, of what to include.

The Basics

In the left-hand margin, include your name and address along with your lender's name and the loan number. These should all be on their own separate lines.

Introduction

This tells the lender the reason for your letter. Simply state in a couple of sentences that you plan to explain why you have defaulted on paying your mortgage and that you hope to work with the lender in correcting the matter.

Main Paragraph

This is where you briefly list the reason you could not pay your mortgage on time. Be concise and to the point. Also, state the date and circumstances of your hardship and whether or not your situation is temporary.

Propose A Solution

Depending on your circumstances, propose a loan modification or short sale. Lenders tend to side with those who do not avoid them because of a debt but rather are willing to work with them.

Ask for Help

If your financial situation will improve, it is worth the investment now to take a draft to a financial planner or take a short online course. You only get one chance at this letter.

References

• "Loan Modification Made Simple: An Insider Guide to Understanding Loan Modification And Preventing Foreclosure"; Thomas Powell; 2008.

Resources

• Hardship Letter E-Course
• Sample Hardship Letter