Sample Hardship Letters

Hardship Letter Samples

Loan Modification (Interest Rate Reset)

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Deed in Lieu (Divorce)

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Repayment Plan (Job Loss)

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Loan Modification (Interest Rate Reset) December 15, 2006 Bob Wilcox Loss Mitigator Your Mortgage Company 987 Lake Road Wilmington, DE 09126 John and Susie Homeowner 1234 Anystreet Ave. Hometown, MN 12345 Account number: 0098767989065433 Dear Mr. Wilcox: We’re writing this letter to explain the extreme financial hardship it will be for our family when our loan adjusts from a 7.75% interest rate to a 10.75% interest rate in August 2008. This interest rate adjustment will cause our payment to dramatically increase of $1,695 per month on top of our current payment of $4,234 increasing the payment to $5,929 per month. Our current income does not support an increase of this magnitude. In fact, a monthly increase of this amount will ruin us financially and within a few short months of this adjustment we will surely fall into foreclosure, as we will not be able to afford the monthly payment. We conducted a counseling session with a HUD counselor recommended by 995-HOPE and submitted a monthly budget. We have a surplus of $158 per month after we pay all of our monthly obligations. According to the counselor, we’re currently spending 54% of our monthly income for housing costs, which is way above the national average. My husband’s income varies from paycheck to paycheck because of overtime, holiday pay (2 times per year) and a uniform allowance. His normal pay is $7,839 per month. I receive monthly Social Security Disability income of $1,435 and am the payee for our son, Christian, for $717 per month. I also receive disability retirement income from Calpers for $830. We would appreciate the opportunity to work out a loan modification where our interest rate will be frozen at the 7.75% interest rate for the DURATION of the loan. If the rate is just frozen for 2 to 5 years we will find ourselves in the same situation in a few short years from now. Please review the information we’ve submitted and consider our request. It’s very important to us that we keep our account in good standing and preserve our credit rating as well as protect our main asset...our home. Thank you for your consideration of our package. If you need more information, John and I can be reached at the address above or at: (765) 276-0763. You can also reach Susie on her cell phone at: (765) 128-7265. Thank you, John Homeowner

Susie Homeowner

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Deed in Lieu (Divorce) February 21, 2008 John Susie Homeowner 1234 Anystreet Ave. Hometown, MN 12345 To whom it may concern: I am writing this letter as part of my hardship package asking for you to take my house back through a deed in lieu of foreclosure process rather than foreclosing on me. When we bought this house 5 years ago, my wife and I both had good paying jobs that provided ample income to pay our mortgage payments and all of our normal monthly bills. Last year, however, my wife left me and our 3 children and filed for divorce. When she left, about 60% of our monthly income went with her. I’ve been working with you over the past 9 months trying to keep my home. As you know, we were unable to complete the forbearance and repayment plan we initially worked out because my employer was unable to let me work overtime. Then, when the President’s Home Affordable Modification plan came out, I applied for that and was denied because I still don’t make enough money to support the modified payment. After I was unable to complete the repayment plan, I hired a real estate agent to sell the house, but that has been unsuccessful as well. We’ve had the house on the market for 4 months and have been dropping the price every 2 weeks, but we still only get about one showing every 2 or 3 weeks and we’ve had no offers. Even though we’re offering it now for $50,000 less than we owe on it, we still can’t get any interest. As you can see from the updated hardship package I’ve included, my income is only $2,500 per month now. And I have about $900 per month in debt and utility payments as well as $600 per month in child care and about $400 per month in food expenses for the four of us. Once the divorce is final, my wife will begin paying child support, but that will only add about $900 per month to my bottom line. So right now, I have about $800 per month I could spend on housing payments and after the child support begins, I’ll have about $1,500 per month. Even that’s not enough to keep our home, though, because of its $2,500 payment. I’m asking you to accept a deed in lieu because we’ve tried every other workout option and nothing has worked. The house is still in great shape and I can pay reasonable costs to ensure you get a clear, marketable title to it. My children and I are so tired of living with the stress of not being able to pay the mortgage payment and I’d really appreciate the chance to take care of this without going through another several months of that stress and worrying about a sheriff’s sale and an eviction. If you need more information, I can be reached at the address above or (765) 276-0763. Thank you, John Homeowner

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Repayment Plan (Job Loss) December 15, 2008 Bob Wilcox Loss Mitigator Your Mortgage Company 987 Lake Road Wilmington, DE 09126 John and Susie Homeowner 1234 Anystreet Ave. Hometown, MN 12345 Account number: 0098767989065433 Dear Mr. Wilcox: We’d like to explain the circumstances that caused us to fall behind on our mortgage payments 3 months ago and ask you to consider allowing us to repay our past due payments and penalties over the next 12 months. John and I are both school teachers and our school district only pays us when we’re actually in school. So every summer, we go for 3 months without our main source of income and have to get summer jobs to make ends meet. This summer, due to the economic downturn the country and our town is experiencing, I was unable to get a summer job like I normally do. School ended in May and we had to miss our June payment. We were sure that I’d find a job, but I just couldn’t even though I spent about 4 -5 hours most days either applying around town, talking to employers, or searching online. As we went into July and missed our second payment, we knew we were in deep trouble and also knew that finding a job was going to be very difficult because no one would want to hire me for only a few weeks before I had to go back to school in mid-August. We were right on both counts. I couldn’t find any work and we couldn’t pay our August payment either. Our monthly income during the summer was only about $1,500. We normally try to save some extra money during the school year to help us piece the summers together, but this year we were only able to save a total of $3,600 to get us through. Together, that gave us about $2,300 per month to get by on. With about $1,800 a month in bills, food, and utilities, we only had about $500 a month left to pay our $1,163 payment. We’ve missed 3 payments now and both of us are back to work full time. John also kept his summer job and will bring in $600 a month by working nights and weekends. We’d like to divide the $3,789 we owe you by 12 equal payments of $315.75 and add them to our normal payment of $1,163 to get us back on track. Please review the information we’ve submitted and consider our request. If you need more information, John and I can be reached at the address above or at: (765) 276-0763. You can also reach Susie on her cell phone at: (765) 128-7265. Thank you, John Homeowner

Susie Homeowner

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"The Honest Truth About Hardship Letters" I truly hope you find these sample hardship letters helpful. I know you’re going through a very stressful time right now, so I’ve added these extra tips to help you get the most out of these samples and to dispel some of the garbage you’ll find on the internet because as you know, expert advice brings expert results. The Samples MUST Be Personalized Don’t take this step lightly! When I say personalized, I don’t simply mean you need to change the names, addresses, and financial information. Even if the situation in the letter matches your situation very closely, you MUST change the letter completely so it’s in your “voice” and comes from you. Loss mitigators will see a template letter a mile away. The 2 Things Your Letter MUST Get Across 1. You have to tell your lender what you’re requesting in language they can understand. You can’t just describe your situation and then ask them to put you in the program that fits you best. 2. You have to assure your lender why your proposed solution will work. If you don’t believe it will work, neither will they. The numbers have to make sense and you have to “sell” it so they believe you’re committed to making it happen. “What No One Else Will Tell You About Your Hardship Letter” It’s not really that important! That’s right...it’s really more of a formality than anything else. It will never convince your lender/servicer to do something that won’t work. The best letter in the world cannot make up for a bad financial situation that’s not going to improve. As one foreclosure book author once told me...

“If the finances make sense, the hardship letter could be written in crayon and it’d work!”

Honestly, if your hardship isn’t resolved, you’re wasting your time writing a hardship letter! I don’t want to burst your bubble, but I also want to let you know you should focus your efforts on what’s truly going to make the biggest difference...resolving your hardship. Once the hardship is resolved, your life can get back to normal. Don’t just save your home, save your way of life...and that starts with resolving your hardship.

“I Need to Get Started, But I don’t Know Where to Start!” If your hardship is resolved, your hardship package is complete, and you’re ready to get started writing your hardship letter, CONGRATULATIONS! Take these sample letters, personalize them for your situation like I discussed above and then send them off to your lender today...DON’T WAIT...do it now! If you’re like many people, though, writing doesn’t come easy. Even with a template, trying to describe your situation in one page is difficult and keeping your letter on track can be hard as well. That’s why we’ve put together a 16 page, step-by-step manual to help you escape your writer’s block. It’s called “Hassle Free Hardship Letters” and is only available at http://www.truthinforeclosure.com/hasslefree . If you’re stuck, please check it out right now. Please check out the Truth in Foreclosure site as well. People just like you are finding answers to their questions there every day. You’re not alone, so don’t go through it alone. We’d be honored if you would leave a comment on the Truth in Foreclosure blog to let us know if you found our hardship letter information helpful. Best Wishes,