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Hardship Letters

What Are They and When Are They Needed?

You are currently in foreclosure and you have submitted a loan modification, short sale, or deed in lieu package to the bank. Your lender sends you a list of documents pertaining to your program and you notice in that they requested a written hardship letter in that list. What exactly is a hardship letter you ask?

A hardship letter is a personalized letter written from a borrower that explains to the bank why they are requesting a modification, short sale, or deed in lieu. The hardship letter is not the basis for an approval but it is important as it explains to the lender why you are requesting assistance with your home and the situation or situations that led you to the point where you are unable to meet your financial obligations and mortgage payments.

What exactly do you say/what should be included in the letter?

There are a few things that your letter must include:

  • Try to keep the letter around 1 page as to not include unnecessary details
  • Always be truthful even if the truth is a little uncomfortable
  • The month, date, and year that your hardship began
  • A detailed timeline of events of what situation or situations caused you to become delinquent on your mortgage payment (Use dates to explain a series of events)

(Example: January 12, 2014 I was diagnosed with.In addition, on May 20, 2016, I lost my job with whom I had worked for, for over 20 years.)

Stating that the house is underwater cannot be a sole factor

  • A request to the mortgage company to assist you with (Modifying the mortgage, a short sale, or deed in lieu) and what you would like them to do to help you
  • Steps you took to try to help the situation (Cut expenses, took a 2nd job)
  • A statement explaining if your financial situation is permanent or temporary
    (Example: For a loan modification, if you recently acquired a new job that pays higher or you were given more hours at work.)
  • A physical signature with the month/date/year the letter is written

Now that you know the basis about the hardship letter, should you need assistance with your hardship letter or your foreclosure package, call our professional housing counselors at United Financial Counselors. We assist our clients with Loan modifications, short sales, deed in lieu, and foreclosure defense.

Our other services include: First Time Homebuyer Education, Credit Restoration, Budget Counseling, and Down Payment Assistance Programs.

You can visit our website for more information.

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