How to Write a Heartfelt Hardship Letter to a Mortgage Company

Act fast to avoid foreclosure.

The sooner you contact your mortgage company about financial problems the better. Writing a heartfelt letter hardship letter isn't difficult, but don't expect the lender to base their decision on emotions. Lenders have an assorted number of foreclosure prevention options that they can make available. Your overall financial status and plan for getting back on track will be as important as the sincerity you express in your letter.

Instructions

1. Get a free copy of your credit report. You may see your mortgage and possible foreclosure as your biggest problem, but your lender will also review your overall financial picture once you apply for help. Be prepared by knowing what's on your credit report. That way you'll be able to respond intelligently if your lender asks you about other red flags on your report such as credit card delinquencies or judgments. Get your free report from the website Annual Credit Report. The major credit bureaus created the site to offer people free reports once a year as mandated by federal law. Visit the site and click on "Request Report" to order or call 877-322-8228. Beware of copycat sites offering free reports while trying to sell you other services. The Annual Credit Report site will never ask you for money.

2. Call your lender. Your letter should be addressed to a specific person at the mortgage company, and you can get that information by calling. Tell the telephone receptionist or customer service agent that you are addressing an important letter regarding the payment status of your mortgage and that you would like to know the name, title and business address of the person responsible for your account.

3. Review foreclosure prevention plans commonly offered by mortgage companies. Your letter should include a specific request for help rather than just detail how tough times are for you at the moment. Knowing what to ask for may help speed things up. Learn about foreclosure prevention plans by speaking with a housing counselor approved by the U.S. Department of Housing and Urban Development. A counselor will speak to you for free and tell you about foreclosure prevention plans such as forbearance, which allows your lender to immediately make your account current by moving your missed payments to the end of the loan. Forbearance could also allow the lender to suspend your payments entirely for several months while you recover from your setback. Or the lender may modify the loan to reduce the monthly payments to a level that you can afford. The housing counselor can tell you about all the options. To find a counselor visit the HUD website or call the agency at 800-569-4287.

4. Write your letter. State the facts and leave out emotion or bitterness. Acknowledge, if applicable, that you have fallen behind on your mortgage payments, and state why this has happened. Mention a job loss, medical bills, divorce or any other factual reasons for the delinquency. Then tell the lender that you are eager to avoid foreclosure by discussing forbearance, or some other plan to address past-due and future payments. Rely on your conversation with the HUD counselor as you make a specific request for help. Be sure to include your name, address, account number and telephone number.

5. Send your letter by certified mail, as this will provide documentation. Wait several days and then call your mortgage officer directly. Assume that your loan officer is always busy and that you shouldn't wait for an initial response by mail. Tell the officer that you mailed a letter and would like to speak about it, or leave a voice mail to that effect. At this point, give the loan officer time to get back to you. Stay in touch with your HUD counselor for further questions.

References

• U.S. Department of Housing and Urban Development: Talk To A Counselor
• Annual Credit Report: Request Report
• Federal Department Insurance Corporation: Foreclosure Prevention