Loan Hardship Letter

A hardship letter could be your only way to secure a mortgage modification. Once you have decided that you cannot pay the lender, it is important to know how to write a quality, yet precise hardship letter. A proper format must be followed, one which contains all the relevant details, from your reasons to future course of action, which can assure the lender that his money will be paid in the future.

Make sure that you address it to the right department or person. Contact the concerned mitigation department if necessary.

In the first paragraph, simply outline the basic reason of your letter or the need to inform the concerned party about your current financial circumstances. Move on to the body paragraph, where you will explain in detail the reasons of the current shortfall. Be precise and conclude by giving assurance that the money will be paid back.


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    Sample for Hardship Letter

    Alex Heal
    New York, 2211
    Envy Company Ltd
    Adam Johnson

    December 13, 2012

    To whom it may concern,

    I am writing this letter to explain you the financial distress I am currently facing that has forced me to become delinquent on my mortgage. Though I have done almost everything to ensure that I do not default on my monthly payments, the current circumstances have made it impossible for me to carry out any further payments, at least for the time being.

    The main reason for the shortfall is the downsizing currently taking place in our company, which I am a part of. My savings are just enough to feed my family, where for now I cannot afford to pay you the money that I owe. However, I am fully committed to making the loan payments and therefore assure you that the current situation is temporary.

    A Loan modification, for now, will greatly relieve some of the stress. I truly hope that you will understand the complications I am currently facing. I anxiously await your response.


    Wayne Rory

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    Template for Hardship Letter

    [Name of Recipient]

    [Today’s Date]

    Dear [Name of Recipient]: (or To Whom It May Concern)

    I have trouble making my monthly payments due to the financial pressure created by the high interest rates. Despite consulting a specialist mortgage broker, I am forced to pay deferred interest payment which had increased my loan balance.

    In addition to that, I have to pay regular insurance premium and taxes, which has made it difficult for me to make ends meet, in the combined annual salary of (me and my wife) $65,000.

    In order to avoid foreclosure, I am requesting for a lower interest rate on the loan mortgage. Knowing our credit history, and given the fact that we have been your customers for over five years, I hope that you will look into our case.

    [Thank them for their consideration]

    [Sincerely or Yours faithfully]

    [Your Name]


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