How to Write a Letter of Hardship For Your Mortgage Loan Modification

Most loan modifications require a letter of hardship. This letter is one of the most important, and often most terrifying, elements of securing a loan modification because it is your only opportunity to fully explain the severity of your financial situation.

Don’t worry! You don’t have to be an eloquent writer to effectively convey your hardships. Just consider the following tips and you’ll easily make a convincing case.

1. Include long term problems. Some long term problems may include the death of a spouse, military duty, or job loss. Of course the list is not limited to those examples.

2. An interest rate increase is not an adequate excuse. You agreed to a potential interest rate hike when signing the loan agreement.

3. Emphasize that you have the ability to pay the loans but cannot do so without a modification. Convince the bank that they will be making a worthwhile investment by modifying your loan in exchange for future repayment.

4. Include all the hardships in your family. If your child has car loans and student loans include those too. Do not forget to include medical bills. The mitigation department would like to know the complete extent of your financial problem.

5. Do your research. Contact the loss mitigation department of your lender and ask them for what they specifically want. Most require adequate documentation for your hardship letter.

While the following steps may seem simple, you must remember to follow through all steps completely. Writing a well-written hardship letter that satisfies all the requirements just might be the factor that will make or break your negotiation.

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