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Loan Modification Hardship Letter

A loan modification hardship letter is an integral part of working with mortgage lenders to permanently alter terms of a home mortgage loan. Borrowers struggling to make their monthly payment must work with their bank's loss mitigation department to determine if they qualify. Once application approval is obtained, borrowers are required to submit financial records along with a letter of hardship.

It is important to take time writing the loan modification hardship letter. Although lenders base their decision on borrowers' ability to pay future mortgage payments, a well-crafted hardship letter can go a long way in achieving a successful outcome.

While there is no established protocol of how to write a hardship letter for loan modification, there are a few basic rules. First and foremost, the letter needs to be easy to read. If your handwriting is eligible, have someone else write it for you or use a word processing program and type it.

In my book, Short Sale Hardship Letter eBook Course, I discuss the pros and cons of writing hardship letters by hand. I interviewed bank loss mitigators and mortgage lenders to uncover the secrets of which type of hardship letter was well received within the banking industry. Without giving away all the secrets presented in my book, I can tell you mortgage lenders over whelming prefer a specific type of letters.

Loss mitigation hardship letters should be concise while providing sufficient details of financial problems. Realize that loss mitigators carry an overwhelming workload and do not have time to read long letters. Stick to the facts by creating an outline of major events. These might include loss of employment, chronic health problems, incarceration or death of a spouse.

It is also important to explain how you plan to stay on track with home mortgage payments. If you have taken a second job, received an increase in salary, or inherited money, include this information in the hardship letter. Borrowers are required to provide proof of finances, so do not exaggerate income or offer to pay more than you can afford.

Last year, President Obama created the Making Home Affordable program to help borrowers avoid foreclosure through modified loans and mortgage refinance. The program requires borrowers to have loan modification requests in place no later than December 31, 2012. Details of the program can be found at

Last year, I published a sample foreclosure letter of hardship for website visitors. The primary difference between foreclosure and loan modification letters of hardship is verbiage. Feel free to use foreclosure hardship letter sample the as a reference point.

Additionally, you can find information and helpful resources on a wide range of mortgage topics in our homeownership article library. Topics include tips for working with loss mitigation; tips to avoid foreclosure; how to obtain short sale approval; and what to expect during the loan modification process.

If you do not qualify for a loan modification or mortgage refinance, discuss the option of entering into a short sale agreement. While short selling does not allow you to stay in your home, it can provide financial relief and help you make a fresh start. Improve your change of obtaining short sale approval by investing in the Short Sale Letter eBook Course available for purchase at

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Published on March 19, 2010 at 03:16 AM | Comments: 2

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i recently came across obama's( and the feds) plans for home owners.. i think its high time the banking institutions stated helping us.. the poor homeowners... great info..,., thanks..,.,,

paul concepcion | March 19, 2010 11:57 PM


I came here by searching google by the phrase hardship letter and found your site. It is filled with a lot of useful information. I wanted to thank you for posting this article.

jariel dagan | January 23, 2011 11:45 PM


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