A mortgage hardship letter is a communication from a borrower to his mortgage lender asking for a loan modification. The hardship letter supports a loan modification application that the lender often needs to process this request. If necessary, you can write the letter yourself using a standard format, but it's a smart move to hire a lawyer to help you with this and the rest of the loan modification process.
Introduction
The first section of a mortgage hardship letter is the introductory paragraph, where you state your business. State who you are (a borrower) and give a quick summary of why you're writing the request. Explain that you wish to modify your mortgage loan to make it more affordable and that this letter is an attachment to your application for modification. You may also want to provide a little background on your history with the company; for instance, if you've been making on-time payments for years, that shows the lender that you've been a reliable borrower to date.
The Hardship
Next you must expand on the situation that has led you to seek a loan modification. Discuss the specific hardship you've been experiencing in detail, such as a job loss or reduction in hours. List as many details and reasons as you feel comfortable providing. Make sure the lender has a comprehensive view of what caused the problems keeping up with payments. If the issue that causes problems making payments is temporary, be sure to state that in the letter because it could indicate to the lender that you can fully manage the loan once the temporary problem is resolved.
How You Plan to Resolve Situation
After you've explained the hardship, you should then give information on how you plan to fix the problem. For instance, if you've had a reduction in hours at one job but have three upcoming interviews for additional work, you can mention that here. Express your genuine desire to get back on track regarding the mortgage agreement.
Suggested Modification
The last important section to include in your hardship letter is a discussion of a suggested work-out for the loan that you can manage financially. For instance, you might want to roll the past due payments in with the loan balance and start fresh with a new due date, or just receive an overall reduction in your required monthly payment going forward. This does not guarantee that the lender will agree to the suggestion, but it could start you in the right direction toward getting a modification that works for your particular situation. If you have cash saved up to put toward the new plan, state that amount as well. Include a listing of your income and expenses as a support to your request and the other details listed on the hardship letter.
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