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Loan modification hardship letter
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Hardship letters are a mandatory part of a loan modification applicationThe application process for a loan modification is very similar to applying for a mortgage with a couple of big differences. When applying to have a loan modified an applicant must provide a hardship letter along with their application. In fact the first thing the lender sees when looking at an application to modify a mortgage is the hardship letter.
The hardship letter is a homeowner’s explanation to the lender why they have defaulted or may soon default on their loan. A good hardship letter will encompass the entire chain of events leading up to the event that necessitated writing the letter. The letter also needs to let the lender know if the situation is temporary or longer term and what the borrower plans to do about the situation.
The letter must also provide the applicant’s name, lender name, and loan number. Because the hardship letter serves to set the tone of the application, it must be descriptive, fact filled, and concise. Try to keep the letter to a single page and make sure to run it through a spell checking program before sending it to the lender.
Below is a template of a sample hardship letter that can be personalized and included with the application for a loan modification.
Sample Hardship Letter
Name: (Your Name) Address: (Your Address)
Lender Name: (Your Lender) Loan #: (your Loan #)
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 loan. 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. As you would expect, 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 (insert reason here and don’t be too lengthy and long winded)
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 (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.
(The approximate date of hardship and we believe that our situation is Temporary or will be Permanent.)
Our situation has got better because (reason here) 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,
Borrower’s Signature
Date
Co-Borrower’s Signature
Date
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