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Hardship Letter for Mortgage Template
What Is a Hardship Letter for Mortgage?
A Hardship Letter for Mortgage is a document written by a homeowner to their lender to explain why this homeowner is defaulting on their mortgage. It must convince a mortgage lender to grant a loan modification or short sale and avoid foreclosure.
The homeowner is under the obligation to describe the exact life changes or circumstances that make it impossible to maintain the home with the current mortgage terms and keep paying for the mortgage. Usually, these circumstances are unemployment, unforeseen pay cut, illness or injury, marital difficulties, including divorce, death of the family's wage earner, and incarceration.
Click on the link below to download a printable Mortgage Hardship Letter template.
How to Write a Hardship Letter for a Mortgage?
A proper Mortgage Hardship Letter should be no longer than one page. Start with the introduction - write your name, address, telephone number, date, and loan number. Share the unfortunate events that happened to you and be as specific as possible in describing their effect on you and your household. Address the following details in the letter:
- Explain how the current financial situation occurred;
- What did you do to improve this situation;
- Why this situation cannot improve in the foreseeable future.
State that you would like to live up to your financial obligation if only you could and assert the only other alternative for you and the lender is foreclosure. To make your case stronger, you need to provide evidence. This supporting documentation usually includes tax returns, bank statements, and pay stubs that show you lack the resources to repay the mortgage on original terms. Lastly, thank the lender for understanding and provide your contact details for further communication.
How to Write a Hardship Letter for Mortgage Loan Modification?
A loan modification changes the original conditions of an existing loan - for instance, the interest rate is reduced, the repayment time is extended, or a different type of loan is negotiated. When you request a loan modification from your lender, the purpose of a Hardship Letter for Mortgage Modification is to make clear you are worthy of it and suggest viable solutions. State which terms of the mortgage you want to amend and demonstrate that a loan modification would benefit both parties.
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