Sample of Personal Hardship Letters - Examples of Hardship Letters - for a loan modification
"Think of a hardship letter as homework.. you have to do it to keep from getting a zero... "
Definition of Hardship
"Hardship" (regarding a mortgage) is any situation beyond the borrower's control that causes the borrower to default or to become excessively late on his or her mortgage payment obligation. Examples of specific hardships are listed at the bottom of this page.
This page also contains a sample of personal hardship letters. Feel free to use a copy of a hardship letter from our list and change it to better describe your unique situation. From the info on this page, you should be able to learn how to write mortgage hardship letter. Letters that appear here are intended to give an example hardship letter to stop foreclosure by:
• initiating loan modification,
• requesting forbearance,
• discussing repayment of overdue amounts, or
• submitting a qualified written request (defined later)
We are frequently asked to give examples of a hardship letter. This page fulfills your request for a sample letter of hardship. The first three letters are examples of loan modification financial hardship letters. The others address additional options available to distressed homeowners.
One of the letters below may be easily adapted to your situation, or you may want to cut and paste different sections from several of the samples we have given and piece them together - sort of a "mix and match" approach.
You do not have to use a specific format for a letter of hardship. Just make sure it is clear, brief, honest, respectful, and positive in tone. And make sure to give your names as they appear on your loan account, the account number, a daytime phone number, your signature(s) and date.
Always follow up on your letter
Make a phone call to your lender to confirm the letter of hardship was received and to keep the ball rolling. You may want to send it by registered mail. When you make your phone call, ask your lender if they can tell you the next step you need to make in the process to avoid foreclosure.
Maintain communication with your lender. This is the only way to drive the process forward. If they haven't received your letter yet, ask them when would be a good time for you to check back with them. Get the name of the person with whom you are speaking, so you can begin to build a relationship.
Maintaining contact with one or two people at your lender's office keeps things less complicated. It is frustrating to have to explain your situation to a new person every time you call your lender.
To stay organized, start a file of your own
The file you keep at home should contain a copy of a hardship letter that you sent to your lender, copies of the documents you included with your letter, and all other written communication between you and your lender.
Along with the file, KEEP A JOURNAL that lists every phone call you have with your lender. Include the name of the person with whom you spoke, the date, and a brief account of what was discussed.
One word of caution:
Facing financial hardship can cause desperation, and sometimes folks can be tempted to make dishonest statements. RESIST that temptation!!! The lender will verify your financial information. If you are caught in an inconsistency, the lender will not want to work with you.
Sample Hardship Letters
Examples of Hardship Letter
Sample Hardship letter #1
Name: Mark W. and Kate G. Wilson (write them as they appear on your loan documents)
Address: 123 ABC Street
Lender Name: First Savings and Loan
Loan #: 1234567
To Whom It May Concern:
We are writing this letter to inform you about some unfortunate circumstances that have caused us to be late on our mortgage payments. We have done everything we can to make ends meet but have fallen short. We would like to ask that you consider working with us on a loan modification. Our sincere goal is to keep our home. We would greatly appreciate any opportunity you could provide to help us do that.
The main cause for our becoming delinquent is loss of employment. We have always been a two income family, but when Bear Sterns went under in July 2008, Mark lost his job. We fell behind on many of our bills soon after that. With our income not being nearly enough, we have gotten further and further behind. Now, we are almost 90 days delinquent. We are determined to pay what we owe, but we have exhausted all means—charging up our credit cards and borrowing from friends and family. We have nowhere else to turn, so we feel it is time to ask if there is any way you could help.
Mark is searching diligently for employment. He is even willing to work outside his area of expertise. The prospective jobs he is considering pay much less than Bear Sterns paid. As you know, the job market is extremely slow in this economy. We feel that a loan modification would benefit us as the borrowers and you as the lender. We would appreciate if you could work with us to lower the delinquent amount and or reduce our payment so we can save our home and keep our commitment to you.
Please find documentation enclosed giving full and accurate disclosure of our finances and illustrating our hardship. This letter and the accompanying documents are true to the best of our knowledge.
We are eager to hear from you. Hopefully, we can resolve this issue soon.
Sincerely and Respectfully,
Mark W. Wilson (signature) Date
Daytime contact number: 777-555-1111
Kate G. Wilson (signature) Date
Daytime contact number 777-555-2222
Sample Letter of Hardship - #2
December 7, 2008 To: ABC Mortgage; account # 058989482
Re: Mortgage Modification
I have an adjustable rate mortgage with your company. Recently when my rate adjusted, the increase was unexpectedly high. I have stretched my budget beyond its limits to afford the new payment. I have even resorted to charging every day budget expenses like gas and groceries on credit cards to avoid being late on my mortgage. My payment is scheduled to adjust again in May 2009.
I am not expecting a pay raise at work. There will be no way I can afford the payment increase that will occur with the May adjustment. Although I am not behind yet, I know that my credit cards will eventually be at their limit. I will soon be unable to afford my mortgage. I am writing with the hopes of renegotiating the terms of my mortgage to avoid defaulting on my commitment to you.
Converting my mortgage to a fixed 5% rate would solve my problem. If getting a fixed rate is not possible, I would like to request that the May adjustment be postponed. This would allow me some time to pursue other options. I would certainly appreciate any suggestions you may have.
Since I purchased my home three years ago, I have done my best to make all payments on time. I value my good payment record and do not want to become a foreclosure statistic. Looking back, I can see that the original loan I procured from Countrywide was not a good one. It was, however, the only one for which I could qualify at the time.
My loan officer and my realtor assured me that future refinancing would not be a problem, however no one foresaw that the housing market was about to take a huge downward turn. I now owe more than my house is worth. Refinancing is not an option for me.
In researching my situation, I became aware of the Fannie Mae Announcement #06-18 (Oct. 4th 2006) regarding Mortgage Modifications. I believe this addresses my situation.
Please find recent pay stubs attached reflecting my current income. I am also enclosing documentation regarding my budget as well as copies of credit card statements showing the living expenses I have charged due to the increase in my mortgage payment.
This letter and the enclosed documents give full and accurate disclosure of my finances to the best of my knowledge.
Thank you so much for your time.
Laura A. Winslow (signature and date) Daytime contact number 777-555-1111
Laura A. Loanmod (signature) Date
Sample of personal hardship letters - example #3 - Generic Template
Your Name(s) as stated on your loan account
Daytime Contact Number
Name of Mortgage Co; Your Loan/Account Number
I/We are requesting that you review my/our financial situation. I/We are in need of a loan workout.
I/We are having problems making my/our monthly payments because of financial difficulties due to (put whatever applies to you from the list below):
• An Adjustable Rate Mortgage Reset/Payment Increase
• A Business Going Under
• Damage to or Loss of Property (natural or accidental)
• Death of the Borrower
• Death of a Spouse or Co-Borrower
• Illness or Injury
• Job Relocation/Transfer
• Loss of Employment
• Medical Expenses
• Military Duty/ Being Sent Overseas
• Pay Cut
• Physical/Mental Disability
• Separation from a Spouse
• Single parent receiving little or no child support
• Other – be specific
Here is a brief account of my/our hardship: (Give the date of when -- or about when-- you encountered your difficulty. Tell whether you believe the situation is temporary or permanent. End by stating that you can no longer afford your payments.)
The content of this letter is true, and the enclosed financial disclosures are full and accurate to the best of my/our knowledge. Thank you so much for your time and attention.
Borrower’s Signature Date
Co-Borrower’s Signature (if any) Date
Hardship letter #4 - Requesting Forbearance
A quick explanation of Forbearance. Forbearance is an agreement between the bank and the borrower in which the borrower is granted temporary reduction of mortgage payments or is allowed to skip mortgage payments altogether for a set period of time. Forbearance may be a good option for homeowners who:
• are already in a good, fixed rate mortgage
• have not had a problem making the payments before
• are experiencing a temporary financial setback
Injury, illness, or loss of employment are good reasons to request forbearance. Be advised that unpaid amounts add up during forbearance and will be added to your loan balance. When forbearance ends, your regular payments will be reinstated but will likely increase slightly because of the new higher loan amount.
Here is a sample letter of hardship requesting forbearance.
February 20, 2009
Chandler M. and Monica E. Bing
123 Main St.
New York, NY 55555
Daytime Phone Number: 555-555-5555
Re: Requesting Forbearance; Loan # 12345678
We are writing to inform you of a financial hardship we are experiencing. On January 30, 2009, Chandler was injured in a car wreck on his way home from work. He sustained severe injuries and was in ICU for two weeks. For a while, we did not know if he would survive. He is out of the woods now, but is still hospitalized. Since the accident Chandler has, of course, been out of work; and we are struggling financially.
Chandler will need a lot of care once he is discharged from the hospital. He will require extensive physical therapy, and the doctors do not expect Chandler to be able to return to work for up to a year. I (Monica) will have to cut back on my hours at my job as a chef in order to provide the care he will require and drive him to doctor appointments and physical therapy sessions. We are preparing ourselves for the difficult year ahead.
Part of that preparation includes getting our finances in order. Our income will be drastically reduced, so there is much concern about our ability to stay current on our bills, especially our mortgage. We are requesting forbearance of our mortgage payments for a period of one year – February 2009 to February 2010.
Chandler is expected to recover fully from his injuries. His employer, New York Graphics, has agreed to hold his position for him until he is able to return. My employer, Alessandro's Restaurant, has agreed to allow me to reduce my hours for the next year. We are confident that this setback is temporary and that we will be physically and financially healthy within a year.
To illustrate our financial hardship we are enclosing our monthly budget along with copies of medical bills, bank statements, our last two years' income tax returns, etc. Even with help from family and friends and using credit cards, we will not be able to pay our mortgage. Forbearance will give us the help we need during this temporary setback.
We take our financial commitment to you very seriously. That is why we are writing to you now before we get further behind. This letter and the enclosed documents are true and accurate to the best of our knowledge.
We hope to hear from you soon.
Chandler M. Bing (Sign and Date)
Monica E. Bing (Sign and Date)
Hardship letter #5 - Requesting a Repayment Plan
Douglas G. Heffernan and Carrie M. Heffernan
123 Main St.
New York, NY 55555
Re: Repayment Plan; Loan # 1234678
We are writing to open a dialogue with you regarding a repayment plan for our missed mortgage payments.Doug was laid off from his job at IPS just before Christmas of 2008 (copy of pink slip is enclosed). We have been struggling financially ever since. Doug's search for other employment has not been successful.
We just received notice that Doug can return to work at IPS on March 2, 2009 (copy of IPS notice enclosed). Once he is back at work, we will be on our feet again financially.
We would like to repay our missed payments over time. We owe for three house payments as well as late fees. The total comes to $4000. We can pay an extra $200 a month over the next twenty months. Our concern is that more late fees will accrue while we are making the added payments.
We fully intend on paying what we owe. We are not contesting the late fees for the three missed payments, but would like to request that no further charges be assessed while we work to repay you.
We are very serious about making good on our financial commitment to you as evidenced by our excellent payment record up until Doug's layoff. Hopefully, we can work together for the benefit of all parties.
Thank you for your time and attention in this matter.
Douglas G. Heffernan (Sign and Date)
Carrie M Heffernan (Sign and Date)
Here is a list of situations that lenders accept as "hardships" :
* Adjustable Rate Mortgage Reset-- Payment Increase—Payment Shock
* Business went under
* Damage to Property or Loss of Property (natural disaster like hurricane, or unnatural like accidental fire)
* Death of Individual Borrower
* Death of Spouse or Co-Borrower
* Job Relocation/Transfer
* Loss of Employment
* Medical Expenses
* Medical Illness or Injury
* Pay Cut
* Physical/Mental Disability
* Separated from Spouse
* Sent Overseas/ Military Duty
* Single Parent With Little or No Child Support
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