A foreclosure hardship letter is used when homeowners are facing foreclosure. It is an integral part of any loan modification or short sale package. Loan modifications are offered to homeowners who want to save their home from foreclosure and have the financial means to become current on delinquent payments. Short sales are offered to homeowners who are unable to become current on their mortgage note. Lenders who accept short sale offers agree to accept less than the amount owed.



Most people find the foreclosure hardship letter the most difficult aspect of loan modification or short sale packages. It can be quite challenging to express the circumstances which caused you to fall behind on your mortgage payments.

Foreclosures are handled by the Loss Mitigation Department of your lender. Employees of this department are known as Loss Mitigators. When you are facing foreclosure, the bank will assign a Loss Mitigator to oversee your account. This individual can make or break your deal, so treat them with respect and provide them with the information they are seeking.

Your hardship letter will be read by your assigned Loss Mitigator. Keep in mind these individuals receive dozens of hardship letters every day. It's important to keep your letter short and to the point, while including pertinent facts.

The foreclosure hardship letter can either be handwritten or typed. If your handwriting is difficult to read, it's best to type the letter. The hardship letter is crucial to a successful transaction; therefore, it is imperative the Loss Mitigator can easily read it.

A business format should be used when composing your foreclosure hardship letter. Your name, address, city, zip and phone number should be placed at the top of the paper. The Loss Mitigator's name, lending institution and address is placed under your contact information. The next line should include the current date, then your loan number placed underneath the date. The body of the letter should be between four to six paragraphs. Close the letter with by signing and printing your name.

Below is an example of the foreclosure hardship letter format:

Joe and Jane Doe

123 Anyplace Avenue

Anytown, State 12345

Sam Jones

USA Lender

123 Anywhere Street

Anytown, State 12345

Current Date

RE: Your Loan Number (include either Loan Modification or Short Sale)

Dear Mr. Jones,

We are contacting you today to explain the circumstances which have caused us to become delinquent on our mortgage payments. Although we have done everything possible to improve our financial situation, we are still short on the money owed to you. We would greatly appreciate the opportunity to obtain a loan modification (or short sale).

The main reason we have become delinquent in my mortgage payments is (explain the reason here). Since we do not have enough income to pay our regular monthly mortgage payment, we are falling further behind and are concerned we will not be able to pay what is owed. We truly want to pay what is owed, but at this time do not know how to accomplish this. Therefore, we are turning to you for assistance.

We are asking for consideration to temporarily reduce or suspend our mortgage payments for a few months (or allow us to sell our home via a short sale). Doing so, would help us get back on track. Our home means a great deal to us and we desire to work with you to keep it out of foreclosure. Please advise us of all options available to stop foreclosure (or initiate a short sale) at your earliest convenience. We are anxious to reach an agreement and appreciate your prompt response.

Respectfully yours,

Print name of Borrower(s)

Signature of Borrower(s)

Loan #

Address

Phone

email address (if applicable)

Send the foreclosure hardship letter via certified mail with a return receipt requested. This will ensure you have proof you sent the letter. The return receipt must be signed by someone at the lending institution and the signature card will be returned to you in the mail.