How to Write Financial Hardship Letters

Hardship letters can prevent foreclosure.

Hardship letters are required by most mortgage companies before you will be considered for a workout option. They provide you with an opportunity to appeal to the mortgage company and convince them to give you another chance. Follow these step by step instructions to write hardship letters. Each section is followed by part of an example hardship letter.

Instructions

1. Begin with your name, address, Mortgage Company, and loan number. Place this information at the very top of the document to make it easier for your reviewer(s) to know exactly who you are. Here is an example of an acceptable format:

   Name: Susan Smith
   Address: 123 Main St. Sunnyvale, CA, 12345
   Mortgage Co: Best Ever Mortgage Company
   Loan no: 123456-2134

2. Create an opening statement that is brief and to the point. Do not ramble or beat around the bush here. Here is an example of an acceptable opening statement for financial hardship letters:

   I am requesting that my financial situation be reviewed to see if I qualify for a workout option.

3. Explain why your financial difficulties have prevented you from making your payments on time. Do this clearly and succinctly. There will be time for more in depth explanations later. Here is an example of a suitable explanation for hardship letters:

   I am having trouble making monthly payments due to financial difficulties caused by ___________.

   In the blank, you could add unemployment, divorce, medical bills, the death of my spouse, illness, military obligations, a payment increase, etc. Make sure you are brief and to the point, on this and any other section of hardship letters.

4. Note when the financial difficulty first began, and whether you believe it is permanent or temporary. If permanent, the mortgage company may not be able to work with you, and hardship letters should only be written for temporary financial problems. Here is an example sentence:

   My financial difficulties began in January, 2009, and I believe that they are only temporary.

5. Explain your situation clearly, in detail, but be as brief as possible. Here is an example of an acceptable full explanation for financial hardship letters:

   I lost my job due to business failure in January, and was unemployed for several months. The money I had in savings was not enough to cover the mortgage and living expenses during that time. I have since found a higher paying job, and will be able to resume making my mortgage payments immediately.

6. Provide an oath of truth, followed by your signature. This is standard practice for all financial hardship letters. Here is an example:

   I, Susan Smith, state that the information provided above is true and correct to the best of my knowledge.

   Susan Smith
   02-25-2009

   If you have a co-borrower, they would place their signature below yours on the hardship letter, followed by the date, in the format given above.

Tips & Warnings

• Be true and honest any time you write hardship letters. If you tell the mortgage company what's really going on, they are more likely to work with you.

• Prove that the situation that made you fall behind in payments was only temporary and that you can again make your payments on time.

• Never complain about the mortgage company in hardship letters, as this will result in a quick denial. Take responsibility for your actions and prove that you are worth another chance.