Writing a hardship letter is necessary when you are applying for a loan modification. In your letter addressed to your home mortgage lender, you have to explain the circumstances which have led you to become delinquent on your loan payments. It must also include your plan to resolve your present financial difficulties and that you are willing to negotiate with your lenders so you can stay current on your loan.
When writing your hardship letter, be brief in explaining your situation. it would be advisable to limit it to one or two pages only.
Give accurate information about your circumstances. Bear in mind that the lender will most likely perform its due diligence and if your information is suspect, you might be permanently disqualified.
There are many situations as to why many would fall behind your mortgage payments. Listed below are just some common hardships that you may use in writing your letter.
·Death of spouse or family member
·Divorce or separation
·Failure of a business
·Medical bills or prolonged illness
·Payment increase on Adjustable Rate Mortgage
·Reduction of income or Unemployment
Give details as to what you have done or are doing to remedy your situation; perhaps a new job or business - anything that signals your finances will improve in the near future. Or if it applies, tell them why you view your present situation as permanent or long term.
State up front how much of a payment you are able to handle. If they get a clear idea of what exactly are your needs, they'll be more likely to come up with a loan modification that will work for you.
Also indicate any amount that you have to compensate for any default. Lenders call this "good faith" money. Typically it is 30-75% of your delinquent fees.
Your hardship letter should also contain your loan number, the delinquency status of your loan, and all necessary data regarding your income and expenditures.
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