How to Write a Hardship Letter for a Mortgage

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If you’re struggling to make your owe payments, it whitethorn look for illustration you’re retired of options and foreclosure is inevitable. However, your owe lender whitethorn beryllium consenting to activity pinch you if you pass openly astir your business and supply a hardship letter.

If you deliberation you whitethorn request owe relief, it’s important to enactment arsenic soon arsenic possible. You’ll request to understand what a hardship missive is, what situations to usage it in, and really to constitute one. This way, you tin perchance debar foreclosure.

Key Takeaways

  • A hardship missive is simply a archive immoderate lenders require erstwhile you’re struggling pinch your owe costs and seeking relief.
  • A hardship missive tin thief you suffice for indebtedness reinstatement, forbearance, repayment plan, modification, a short sale, aliases a deed successful lieu of foreclosure.
  • Mortgage alleviation for financial hardships is often disposable successful circumstances for illustration a occupation nonaccomplishment aliases illness.
  • A hardship missive should see specifications astir your financial hardship and nan alleviation you’re requesting.

What Is a Hardship Letter?

A hardship missive is simply a archive you supply to your owe lender erstwhile requesting mortgage relief. In nan letter, you’ll picture your financial hardship and supply supporting documents. It whitethorn besides beryllium adjuvant to explicate really agelong you expect nan hardship to past and really you scheme to resoluteness it. Finally, explicate what type of owe alleviation you’re requesting.

Generally, nan extremity of a hardship missive is to thief you debar foreclosure. There are respective types of owe relief—also known arsenic nonaccomplishment mitigation—that whitethorn beryllium available, depending connected your situation. Some of these solutions let you to support your home, while others don’t. 

Here are immoderate owe alleviation options that whitethorn beryllium available:

  • Loan reinstatement: If you haven’t been making your owe payments, a indebtedness reinstatement allows you to repay nan magnitude you beryllium and get caught up.
  • Loan forbearance: If you are facing hardship that will forestall you from making your payments, forbearance whitethorn let you to temporarily region aliases trim them.
  • Repayment plan: If you’ve fallen down connected your payments, you tin summation your payments temporarily until you’re caught up.
  • Loan modification: Your lender whitethorn work together to little your monthly costs by modifying definite position of your indebtedness to make your payments much affordable.
  • Short sale: If you tin nary longer spend your payments and you’re underwater connected your mortgage, a short sale allows you to waste nan home.
  • Deed successful lieu of foreclosure: This action allows you to relinquish ownership of nan location while avoiding a short waste aliases foreclosure.

Keep successful mind that not each solution will beryllium disposable to each borrower facing hardship. The indebtedness alleviation options disposable to you whitethorn dangle connected some your mortgage lender and your financial situation. When you’re penning your letter, it whitethorn beryllium adjuvant to picture really a peculiar shape of alleviation would thief amended your business and get you backmost connected way pinch your payments.

Hardships That Qualify for a Letter

There’s not a group database of hardships that will suffice for indebtedness relief. You whitethorn suffice if you’re experiencing immoderate hardship that’s retired of your power and has impacted your expertise to make your indebtedness payments. Some of nan astir communal reasons for a hardship missive include:

  • Job loss
  • Divorce
  • Death of a spouse
  • Illness 
  • Reduced income
  • Natural disaster
  • Military service
  • Expected emergency expenses

To suffice for indebtedness alleviation based connected an expected emergency expense, nan disbursal must mostly beryllium 1 that’s retired of your control. For example, awesome aesculapian bills aliases location repairs whitethorn thief you suffice for owe relief, while gambling losses aliases a ample discretionary acquisition astir apt won’t.

If you’re facing 1 of these hardships, it’s important to interaction your indebtedness servicer arsenic soon arsenic possible. If you extremity making your payments without notice, your indebtedness will go delinquent and whitethorn yet spell into foreclosure. At that point, it whitethorn beryllium excessively precocious to research your different options.

How to Write a Hardship Letter

If you’re struggling to make your indebtedness payments and request owe relief, there’s a step-by-step guideline to thief you:

  1. Introduce yourself: Give your name, relationship information, and nan logic you’re penning nan letter.
  2. Describe your hardship: Whatever business that’s preventing you from making your indebtedness payments, picture it here, focusing specifically connected nan financial details.
  3. Discuss nan timeline: You tin see nan magnitude of clip you’ve been successful nan situation, nan solutions you’ve tried, and really agelong you expect nan hardship to last.
  4. Request relief: In your letter, inquire for a circumstantial type of owe relief, specified arsenic indebtedness forbearance, modification, a short sale, aliases thing else.
  5. Describe nan perfect outcome: Explain to your lender really nan alleviation would thief your business and thief you get backmost connected way pinch your payments.
  6. Close retired your letter: End your missive by summarizing your petition and thanking your lender for their time.
  7. Provide supporting documents: Enclose immoderate financial documents that show your hardship and tin thief nan lender understand your request for relief.

Example of a Hardship Letter

If you aren’t judge wherever to commencement connected your hardship letter, here’s an illustration you tin usage to get started. Remember that this 1 is only an illustration letter. You should constitute your ain that’s circumstantial to your situation.

To Whom It May Concern,

My sanction is John Smith, and I’m penning to petition a impermanent indebtedness forbearance for my owe connected my location astatine 123 First Street. I’ve had my owe pinch (financial institution) for (number) years and person ne'er missed a payment, but I americium presently incapable to make my monthly owe costs of $(amount).

Recently, our family faced unexpected aesculapian bills that person near america incapable to make our owe payments. Though we’ve reduced our expenses elsewhere, we’re still incapable to salary nan aesculapian bills and meet our different financial obligations.

I’m penning to petition indebtedness forbearance connected my mortgage. The aesculapian bills full $(amount). Based connected my calculations, I’m assured that if I could suffice for indebtedness forbearance, I could salary disconnected nan aesculapian bills wrong (number) of months and resume my owe payments.

Thank you for your clip and for considering my indebtedness forbearance. I’ve attached copies of nan aesculapian bills successful mobility and a transcript of our monthly budget.

Sincerely,

John Smith

How Do You Write a Proof of Hardship Letter?

To constitute a impervious of hardship letter, you should present yourself, picture your financial hardship, item really agelong you expect nan hardship to last, petition a circumstantial type of owe relief, and explicate really that alleviation will thief you get backmost connected way pinch your indebtedness payments.

What Should You Not Put successful a Hardship Letter?

When penning your hardship letter, you should item nan financial facts surrounding nan business while leaving retired your emotions astir it. While you whitethorn deliberation an affectional entreaty will thief you, it’s not nan intent of a hardship letter. Additionally, debar directing blasted aliases anger toward nan lender.

What Is Considered a Hardship Reason?

Generally speaking, a financial hardship is thing that’s extracurricular of your power and has impacted your expertise to make your owe payments. Common examples see occupation loss, divorce, illness, and unplanned emergency expenses.

What Is an Example of a Good Hardship Letter?

An illustration of a bully hardship missive is 1 that describes your financial hardship successful a professional, unemotional measurement and provides archiving arsenic grounds of your situation.

The Bottom Line

Unfortunately, galore group find themselves successful situations beyond their power wherever gathering their financial obligations becomes a challenge. Often, nan homeowner whitethorn look foreclosure. 

If you return action early, you whitethorn beryllium capable to debar foreclosure by providing your lender pinch a hardship missive and requesting owe alleviation successful nan shape of indebtedness modification, foreclosure, short sale, aliases different option. If you’re unsure of nan champion adjacent steps, see speaking pinch an lawyer aliases a Department of Housing and Urban Development (HUD)-approved lodging counselor.

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