What Is a Hardship Letter and How Do You Write One?

Maintain it unique

The aim of a hardship letter is to convey a way of sincerity and dedication to your lender. Copying another person’s letter or simply discovering one on the web is the flawed transfer. It wants to come back from the guts…your coronary heart.

Significance of the Hardship Letter or Affidavit

With a brief sale, the principle factor the lender will consider is whether or not the quantity they’re going to obtain within the brief sale is as a lot as they count on to get from promoting the property following a foreclosures. Whether it is useful for the lender to do a brief sale and also you meet the standards, you may be accepted. The hardship letter or affidavit is merely a part of the method.


Don’t use jargon or fancy phrases

An effective way to maintain your letter brief and direct is through the use of easy language. Collectors wish to hear from you, not the dictionary. Write as clearly as in the event you have been chatting with them face-to-face.

Factors to Deal with

Hardship letters are sometimes not than a web page. They need to deal with all the following key factors:

  • How the present monetary scenario arose
  • What has modified in the actual property market because the unique financing
  • What you’ve completed to attempt to enhance your scenario
  • Why it can’t be additional improved

Lenders could require documentation similar to pay stubs, tax returns, or financial institution statements to show that you simply lack the sources to repay the mortgage in full. Additionally it is a good suggestion to offer comparable gross sales from an agent to again up your declare that you may't get sufficient to your house to cowl the prices.

Hardship Letter Errors

Don’t use the letter as an outlet for anger or to attempt to make a discount or a political assertion. Chorus from criticizing the financial institution, stating that relations will mortgage the cash wanted, or suggesting that you’ve got a secret account with different funds. Doing so may trigger the financial institution to comply with up on this stuff and require the extra cash to finish the sale.

Don’t promise issues will flip round quickly, both, as a result of that could be a good purpose for the financial institution to show you down. Remember that if there’s any signal a house owner will turn out to be financially entire once more, the lender will bounce on it.

Your hardship letter is just not the place for optimism.

Dont Point out Any Obtainable Outdoors Cash

Don’t point out your capacity to acquire more cash in your hardship letter. This will likely appear apparent, however it’s not all the time so reduce and dry. You might assume you might be describing a unfavorable scenario, however the lender could view your assertion positively.

For instance, you possibly can be describing the truth that you’ve exhausted all your sources attempting to pay your money owed. You might state, “What do they need you to do, borrow $15,000 out of your sister?”

If the lender thinks you’ve a sister who may doubtlessly lend you $15,000, you might not be accepted for a brief sale, or you’ll have to place in a vendor contribution when the brief sale happens. Don’t use such a instance to show some extent. Don’t embody any extra cash you possibly can have entry to, even whether it is theoretical.

What Is a Hardship Letter?

A hardship letter or affidavit (see beneath) is a part of the loss mitigation utility course of and is one thing it’s essential to present together with pay stubs, tax returns, a monetary assertion, financial institution statements, and every other data your mortgage servicer (the corporate that handles your mortgage account for the lender) requests. (To be taught extra about loss mitigation purposes, see Steps to Get Your Mortgage Loan Modified.)

Particular Steps for Writing a Hardship Letter:

Each hardship letter ought to be personalised, unique and direct. Nonetheless, there are a number of other ways to format or plan the letter’s contents. Here’s a fast breakdown of a typical four-paragraph define that you need to use to information your personal letter.

Tips on how to Describe Your Hardship

The primary paragraph ought to deal with introducing your self and your specific scenario. This would be the part that explains precisely what your hardship is and set up your want to work with the lender to proceed paying off your money owed.

Right here’s an instance for a medical hardship letter:

“I’m writing to you as a result of I used to be unable to work for a number of months on account of an damage. Throughout this time, our emergency financial savings have been exhausted and we fell behind on our money owed. Now that I’m healed from my damage and able to return to work, I imagine I may resume common funds in the event you would make changes to our mortgage.”

This paragraph works as a result of it’s temporary. With solely 4 strains, it doesn’t drag on however clearly explains the scenario with out too many pointless particulars. It additionally mentions that the borrower could be able to resume funds if given a modification.

In fact, not each scenario might be resolved. For instance, you may not have an damage that has totally healed. In case your hardship was everlasting, you’ll have to clarify that your scenario has modified, however nonetheless intend to renew making funds with the creditor’s assist.

Right here’s an instance for a divorce hardship letter:

“Because of my latest divorce, my family has been diminished from two incomes to 1. Due to this lack of revenue, I’ve fallen behind on my mortgage funds and sunk into bank card debt to remain afloat. I’m working with a debt coach to provide you with a funds and a plan to repay my money owed, which I believe I can do along with your assist.”

Once more, the main focus is on explaining shortly what occurred and why the borrower has fallen behind in your funds. It additionally talked about that they imagine they will resume making funds if the creditor agrees to work with them.

This paragraph is a superb instance of mentioning two sorts of adversities – a life occasion hardship and a mortgage hardship. You probably have a number of hardships that contribute to your scenario, you must listing all of them. In fact, attempt to keep away from too many paragraphs and lengthy, unbroken narratives.

Your Response to the Hardship

After you describe your hardship, it’s time to enter extra element about what you might be doing to resolve the scenario. The second paragraph will deal with what you’ve completed or are at present doing to resolve your hardship and sustain along with your obligations.

Be clear and trustworthy when describing the steps you’ve taken to this point. In the end, your actions alone is not going to be sufficient so that you can resolve the scenario, and the letter ought to assist the concept you want the creditor’s assist. Keep away from holding again and minimizing your scenario.

For instance:

“Since my divorce, I’ve labored onerous to stay beneath a restricted funds, however I’ve reduce and diminished the whole lot I can and nonetheless don’t have sufficient to fulfill all of my obligations. Now that my divorce is last, my revenue and bills have stabilized. Whereas I don’t have sufficient to make ends meet beneath my present funds, I imagine a discount in funds for the following six months from you’ll allow me to renew making common funds going ahead.”

Bear in mind, the objective of the letter is to get some form of assist out of your creditor. The letter has to ascertain that you simply want that assist if you’ll succeed.

What’s the Purpose of the Hardship Letter?

Now that you simply’ve acknowledged your hardship and mentioned what you’ve completed to this point, you could state extra explicitly what you need out of your creditor. That is the paragraph the place you possibly can straight ask what you count on the lender to do.

For instance:

“I imagine a diminished rate of interest would permit me to afford to make my funds going ahead. I’d like to debate this with you as quickly as doable so we will work collectively to discover a resolution.”

Brief and to the purpose, this message tells the lender precisely what you count on, and what they need to contemplate. By offering an answer that can resolve each you and the lender’s downside, you possibly can show that you’re keen to do the work you might be proposing.


The final paragraph is your conclusion. That is your likelihood to sincerely thank the lender for his or her time and specific your hopes of working with them sooner or later to unravel your joint downside.

You’ll additionally wish to embody supporting documentation to again up the whole lot you’ve stated to this point. Make sure to embody copies of related payments, orders, letters, and every other paperwork to substantiate your hardship claims and point out their inclusion

For instance:

I really hope that you’ll contemplate working with me. I’ve enclosed copies of the accident report and medical data as documentation to my claims. Please attain again out at your earliest comfort in order that I could start to settle my excellent loans.

A fast ending, signature, and date are all you could wrap up your debt hardship letter. Bear in mind to comply with up as soon as the letter has been despatched by telephone or in particular person.

Do You Even Have to Write a Hardship Letter?

You might not want to write down a hardship letter to get the aid you want. Some monetary establishments present all the data to request hardship help on their web sites.

Financial institution of America, for instance, has a web page for home loan assistance that walks you thru your choices, exhibits what paperwork you may want and supplies telephone numbers you possibly can name to ask for assist. By way of their website, you’ll be taught that in case you are struggling to pay a mortgage owned by Fannie Mae or Freddie Mac, you’ll need to finish an official mortgage assistance application and connect any required documentation.

Some mortgage servicers, similar to Fifth Third Financial institution, will even will let you complete a hardship application online.

Equally, American Specific has a web page the place its bank card clients can discover ways to request financial relief within the type of quickly decrease month-to-month funds and rates of interest. You might be able to view plan choices and enroll by logging into your account on-line. Different collectors additionally provide methods to request monetary hardship help on-line whereas logged in to your account.

If you may be making a telephone name or talking with somebody through on-line chat, writing a hardship letter first may aid you manage your ideas. As an alternative of writing a whole letter, although, it’s possible you’ll discover it simpler to write down a script or make a listing of bullet factors you wish to deal with.

Errors to Keep away from in Your Hardship Letter

If you write the hardship letter, do not embody something that might damage your case. Listed below are some examples of belongings you should not say within the letter:

  • Do not say that your scenario is your lender’s fault or that their workers are jerks.
  • Do not state that issues are going to show round for you quickly as a result of if the lender thinks you may need the monetary means sooner or later within the close to future to repay a part of the debt, you may not be accepted for loss mitigation.
  • Do not point out that you’ve got entry to funds that are not proven elsewhere in your brief sale utility. For instance, do not say one thing like “I may borrow $10,000 from my mom” as a result of then the lender may require a contribution from you earlier than approving a brief sale.

What Is the Objective of a Hardship Letter?

Earlier than you start drafting, you could determine on the objective of the letter. What are you going to ask for particularly? There are a number of requests you may make out of your creditor, collections company, or mortgage lender, together with:

  • Suspending late quantities
  • Bringing your account present
  • Adjusting your rate of interest
  • Decreasing your minimal funds
  • Modifying your mortgage
  • Agreeing to a brief sale of a house
  • Contemplating a settlement choice

In case you’re unsure about your choices, you possibly can all the time work with a personal financial coach who may also help you discover your choices. Our credit score coaches are skilled in writing letters to collectors for a number of sorts of hardships, together with life occasions, bank card, and debt.

Suggestions for Writing a Brief Sale Hardship Letter

There are particular issues you possibly can say or do in a brief sale hardship letter that might preserve your brief sale utility from being accepted. You wish to keep away from these errors!

Discuss to a Foreclosures Lawyer

In case you’re going through a foreclosures and have authorized questions, contemplate speaking to a lawyer to get recommendation about your specific scenario. You may additionally contemplate speaking to a lawyer in the event you’re attempting to get a loss mitigation choice, however the servicer is not complying with the regulation or is treating you unfairly. (To be taught when you must contemplate hiring a lawyer that can assist you with a modification, see Nolo’s article Should I Hire a Lawyer to Help With My Mortgage Modification?)


  • Jeremy C June 18, 2016 I labored on the loss mitigation division for a significant financial institution and we used to get the identical letters from totally different individuals many times as a result of most individuals would simply obtain and print some inventory letters from web sites similar to . Whereas its completely alright to get concepts from the web, anyone attempting to write down an efficient hardhip letter ought to put their very own spin on it. Though it’s not definitive, utilizing pen and paper does assist. It appears to be like extra genuine and it’s simpler when introduced to the banks determination makers. Reply