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Tips for Drafting a Financial Hardship Letter
A hardship letter helps the lender or servicer evaluate your situation and find the appropriate solution based on your intent, income, loan and circumstances.
When attempting to modify your home loan you must deliver a compelling story to your lender as to why you need a lower mortgage payment. Here are a few tips on how to draft a convincing hardship letter.
Your hardship letter should:
Include all borrowers’ names, loan number, and property address up front and center so the servicer/lender can locate your loan easily. State your intent: do you want to keep your home or not? Explain clearly the reason you cannot meet your monthly mortgage obligation.
For example:
“In June of 2007, I lost my job. Over the months of July, August and September I struggled to make my monthly payment, but still succeeded. When the interest rate increased on my adjustable loan, in spite of budgeting and cutting down on any unnecessary expenses, I was no longer able to make the payment…” Also, state whether your hardship is temporary or permanent. For example, if you lost your job and have now regained employment, it is a temporary hardship. Can you resume paying the same amount you paid prior to the hardship? State clearly how, when and where you want to be reached. Be clear and concise – describe your situation, but don’t make it too long.
Hardship letters present you and your circumstances to the lender or servicer. Make sure to provide a clear and understandable explanation.
If you are still not comfortable with the process, then I strongly suggest you consult with a loan modification attorney to seek an expert opinion and explore all of your options.