The foreclosure hardship letter is a large and important part of a loan modification program. There are options available to homeowners facing foreclosure and loan modifications can be the primary answer. These are offered to homeowners who sincerely desire to prevent their home from foreclosure and who have, or will have, the financial means to become current on their mortgage note within a specified time once their monthly payments are reduced by the loan modification plan.

The foreclosure hardship letter is not the most fun document to write. In fact, many people in this position believe it to be the most difficult part of getting their loan modification package together. Because unless you have some experience in this type of correspondence it can be quite difficult to express yourself let alone the circumstances of the delinquency on your mortgage payments.

The hardship letter will not be given to a collections department, rather it will be read by a loss mitigator. Loss mitigators work for the lender. They read many hardship letters every day and have to spend hours picking out the facts. This is why you have to be concise and give them all the answers up front. This saves time for reading and, as a result, your answer will come sooner.

Believe it or nor, some people hand-write their foreclosure hardship letter. And if you have good handwriting this could be a plus. However, to be on the safe side, it’s best to either type it out yourself or have someone do it for you. The main point is the loss mitigator has to be able to read and get the facts from this letter.
Here are some pointers for a foreclosure hardship letter:

1. Always use a business format.
2. Put your name, address, city, state, zip and phone number at the top of the page.
3. Leave two spaces.
4. Now put the name of the loss mitigator, lending institution and its address.
5. Leave two spaces
6. Current date
7. One space
8. Loan number
9. The body of the hardship letter should be about four to six paragraphs in length.
10. Thank the loss mitigator for his or her time
11. Sign your name.
12. Print your name below the signature
Better yet, review the sample hardship letter below and find your voice. With a sample hardship letter you can shape your financial future.

Foreclosure Hardship Letter

Type of Letter: Loan Modification
1st/2nd/Heloc: 1st mortgage
Type of Hardship: Reduced income, medical
Property Category: Primary Residence
Lender: Chase

Loss Mitigation Department
Chase Mortgage
P.O. Box 78420
Phoenix, AZ 85062-8420

To Whom It May Concern:

Re: Request for Loan Modification at ________________________.

Loan Number: _________.

I am writing in the hopes that you can help us lower our monthly mortgage payments through a loan modification plan and rescue our home from foreclosure.

Hardship:
My husband and I are both self-employed. He is a contractor and I am a bookkeeper. Because of the current economy, the construction business has come to a crawl. My husband’s work has become so slow that even my two sons who work for him are looking for jobs elsewhere. My pay was also cut last year, and it has been an enormous financial shock to adjust to such a large reduction to our household income. Our current debt-to-income ratio is __%, and we can’t stay afloat much longer.

We have also had some other family-related issues that have been financially and emotionally taxing. After my father passed away in ____, my mother moved in with us. Shortly thereafter, she was diagnosed with Alzheimer’s. For the next five years she lived with us, and we did our best to take care of all her needs. After this time-period, she needed more care than we could give, and the cost of this and her medications were severely draining financially. We were forced to put her in a nursing home and take out a line of credit against our rental property so we could afford this.

Status of payments/ Ability to pay going forward:
We are current on our payments, but cannot pay at the current rate much longer.

We are doing everything we can to stay alive financially. We have carefully examined our budget and cut out all unnecessary expenditures. We even had our son change colleges from ____________ to one closer to our home so we could save the room and board money. We are also proactively working to drastically reduce our credit card debt.

Request:
Because of our debts and worsening loss of income, we are asking that you help us to modify our mortgage payment to around $___ a month. We have carefully combed through our budget in order to arrive at this payment amount and even asked an accountant to review it.

If you agree to this plan to reduce our monthly mortgage payments, we’re certain that we’ll free up enough to afford the payments on our home. We built this home from the ground up more than __ years ago, and we only seek to keep it for ourselves and our children and grandchildren.

We very much appreciate your consideration of our request.

Thank you very much for your time.

Sincerely,

Enclosures:
1. IRS 4506-T
2. 2 months of recent paystubs
3. Most recent tax return
4. Monthly housing & loan obligations