Hardship Letter

Loan Servicers, banks or lenders typically ask for a hardship letter from the homeowner as part of the documents needed for an acceptance in a loan workout or or loan modification.  A common hardship letter will detail the compelling reasons  why the homeowner should expect an acceptance to new loan conditions, rates and terms from the their lender.   This document is a vital component to having cause to stopping a current foreclosure.  This letter gives a narrative and outline of what has happened to cause a homeowner to arrive in the position they currently, hold.  It gives reasons why the homeowner is having financial hardships and why they can't make their financial opligations, as agreed in their current loan agreement.

When you put together your own hardship letter, keep it brief and straight to the point. Keep in mind that the average loss prevention employee is over worked and under paid.  They will most likely scan over your letter and look for key points to make a determination as to your merits.   Keep you letter  between 1 and 2 pages in length. 

Hardship letters have to have the specific reasons for the hardship bulleted or spelled out in the letter. Here is a list of the most common reasons for hardship:  

1. payment shock caused by an adjustable rate mortgage adjustment
2. Loss of you job
3. Divorce
4. Military duty
5. Reduced Income
6. Failed Business
7. Incarceration
8. Illness
9. Medical Bills
10. Damage to the property
11. Death
12. Death of a Spouse or Co-Borrower
13. Marital Separation
14. Loss of Job
15. Other, you specify.

Know you have the task to produce the compelling reason why you should be considered for a loan modification. Take your time, right down the key points and that start creating your letter.