If you are looking for a financial hardship letter example that will help you prevent a foreclosure, read the following article.
When you ask for a loan workout or a loan modification process, the lender will ask for a hardship letter. This is a type of written explanation about an ‘event’ that caused you to fall behind on your mortgage. It covers your ‘current life’ and the troubles you are facing that is making you unable to meet the financial obligations. It is written to the lender who is an extremely busy person. Therefore, do not be tempted to write an autobiography. It should be short, to the point, highlighting your problems. Its length is usually only 1 or 2 pages long. The article below provides a hardship letter example.
List of Hardships that may be Considered
- Illness
- Sudden loss of job
- Reduction in the average income
- Business setback
- Job relocation
- Death of co-borrower or spouse
- Divorce
- Military duty
- Medical bills
- Damage to property due to natural or unnatural disaster
- Any other (specify)
Once you have understood the grounds for asking for a modification, you need to write the letter. It is a one-piece loan workout process that will help you avoid a foreclosure. You should make a copy for yourself and send over the original to the lender. Do not forget to include with it all the relevant documentation and statements (if any). The following are a few formats that will help you.
Sample I
| Hardship Letter for Mortgage Companies # 1 |
| Date – ………………. RE: Hardship Letter – Loan Modification Account Number – ………………… Name of Applicant(s) Address, To Whom It May Concern: This is a very depressing and painful time for us and our family and we write this letter as a last option. We were just notified last week that our final attempt to refinance has been denied. The value of our home is worth less than what we owe on our two mortgages and the programs needed to make my monthly payments reasonable simply do not exist anymore. Refinancing and or selling our house is no longer an option! When we originally got the loan with Option One, we were told that we would be able to refinance before the loan went adjustable. Now that we cannot refinance and our payment has gone up from USD_____ to USD_____ leaving us with an extra USD_____ to come up with every month. This is something we simply cannot afford. We have tried to do everything we can to sell the house and refinance, but these options are no longer possibilities. There are many “bank owned” properties in our neighborhood, and it seems as if we still have a long time until the market stabilizes. We do not want to get behind or foreclose, but that will be the end result if our mortgage payments don’t go down. Our attorney has advised us to walk away from the house (foreclosure) and file bankruptcy, but we prefer to avoid further destruction of our credit. We deeply appreciate your help and understanding in this matter. If you have any questions, or need more information, please feel free to contact us. Sincerely, Signature |
Sample II
| Hardship Letter to Stop Foreclosure # 2 |
| Date – ……………….
RE: Hardship Letter – Loan Modification Account Number – ………………… Name of Applicant(s) Address, To Whom It May Concern: I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home, and we would really appreciate the opportunity to do that. The main reason that caused us to be late is (add the reason in short and to the point). Soon after being late and our income not being nearly enough, we had fallen further and further behind. Now, it’s to the point where we cannot afford to pay what is owed to the (lender). It is our full intention to pay what we owe. But at this time we have exhausted all of our income and resources so we are turning to you for help. Our situation has got better, because (add the reason), and we feel that a loan modification would benefit us both. We would appreciate if you can work with us to lower or delinquent amount owed and or payment so we can keep our home and also afford to make amends with your firm. We truly hope that you will consider working with us and we are anxious to get this settled so we all can move on. Sincerely and Respectfully, Mr. & Mrs. __________________ |
These are some of the examples that you can use as reference when writing a hardship letter. A loan modification is requested only if no other reasonable option is available and or the home owner is genuinely facing any hardship. Also, you should keep in mind that loan modification is basically designed for those who can afford homes but cannot afford their loans.
