A loan modification is a great way to get your budget back on track when you are having problems managing your monthly mortgage payments. When you apply for a loan modification with your mortgage servicer, they will request what is called a hardship letter. This is the letter where you will explain the details of your financial situation, and the reasons why you can no longer afford your mortgage payments.

Having a well written hardship letter is one of the most important steps in getting your loan modification approved. In this article we will explain how to write one and also give you a couple examples that you can use as a template for your own letter.

The first thing you will want to do when preparing the letter is to compose a chronological list of all of the factors that have caused you to fall behind (or may) on your mortgage payments. Eligible hardships include a job loss, income reduction, illness, relocation, divorce, medical bills, death of a spouse, etc. In your letter you will also want to make a note of when each event occurred and include any documentation that you can.

Next you will then need to detail the steps you are taking to correct your situation. For example, if you recently lost your job, you will want to show that you have a new job or how you are actively searching for employment. You will want to provide as much documentation as possible to support your claims in order to prove your hardships.

In the last part of your letter you will want to make a request for a loan modification and briefly explain how approving you for a modification is really a win-win proposition for both parties involved. You may also want to propose an interest rate and payment that will be affordable to you based on your current financial situation.

Please keep in mind that your mortgage servicer is probably very busy and they have many people like you who need help. Therefor, you will want to try to keep the length of your letter to about one to two pages at most.

Here are two example letters written by real homeowners and members of  the LoanSafe  forum who had received a loan modification from their efforts.

Name: (Your Name)

Address: (Your Address)

Lender Name: (Your Lender)

Loan #: (your Loan #)

To Whom It May Concern:

We are 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 in the amount of $1695 per month on top of our current payment of $4234.10 increasing the payment to $5929.10 per month. Our current income does not support an increase of this magnitude. As a matter of 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 woman named Deborah Winston (888-669-2227 x742) from 995-HOPE and submitted a monthly budget where we only have a surplus of $158 per month after we pay all of our monthly obligations. According to the counselor we are currently utilizing 54% of our monthly income for housing costs which is way above the national average.

My husband, Kevin is the bread winner in the family and his income varies from paycheck to paycheck because of overtime, holiday pay (2 times per year) and uniform allowance. So, sometimes he makes his base pay of approximately $7839 per month and other times he makes more than that depending on the overtime he works each month. However, overtime is never guaranteed so we cannot depend on the overtime in order to fulfill our monthly obligations.

I am currently receiving Social Security Disability in the amount of $1435 and am also the payee for our son, Christian in the amount of $717 per month. Also, I receive a check from Calpers for my disability retirement in the amount of $829.74.

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 take the time to review the information we submitted and consider our request. It is 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 in advance for your time and consideration in this matter. We are looking forward to working with Option One to resolve this situation. If you have any questions please contact us at xxx-xxx-xxxx.

Sincerely and Respectfully,

Borrower’s Signature
Co-Borrower’s Signature


Sample Hardship Letter #2

Name: (Your Name)

Address: (Your Address)

Lender Name: (Your Lender)

Loan #: (your Loan #)

To Whom It May Concern: 

I am writing this letter to explain my unfortunate set of circumstances that have caused us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we have fallen short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.

There are several reasons that caused us to fall behind on our payments:

a) On July 6, 2007 my husband, was laid off from his job with IBM. He no longer receives Unemployment Compensation from the State of Florida as of January 2008.

b) Since July 2007, we went down to one income and were unable to keep up with the higher mortgage payments due to our escrow account from the beginning of 2007 being short on funds due to raised taxes and insurance coverage in Flagler County, FL.

c) In November 2007 we had to fly out of State for a family emergency which did not enable us to make that months payment. 

d) Since we no longer have medical coverage, I had to pay for my visits to the doctor on several occasions due to prolonged and excessive menstruation. The Doctor Office would not see me, unless I had full payment at each visit.

e) Since there is only one income in our household, but my husband helps me with my business while still looking for a comparable job, I must travel a lot. Gas prices have become extremely high, if I do not travel to do presentations and meet with clients I cannot assure growth.

It feels like catch up for those two months we fell behind on is almost impossible, I assure you we have every desire of retaining our home and repaying what is owed to Bank of America. But at this time we have exhausted all of our income and resources so we are turning to you for help.

Our situation is getting better because like I stated above, my husband and I have combined forces and we are working my business together in order to ensure stability and growth in our income and we feel that a loan modification would benefit us both. We would appreciate if you can work with us to lower our delinquent amount owed and/or our mortgage payment so we can keep our home and also afford to make amends with Bank of America. 

We truly are looking forward to you working with us and we are anxious to get this settled so we all can move on.

Sincerely and Respectfully, 


You can find more examples of various hardship letters right here written by different homeowners in the LoanSafe forum. If you are currently pursuing a loan modification or any other type of loan workout, we strongly encourage you to join our free forum here on LoanSafe.org. We are a community of over 33,000 homeowners and mortgage professionals alike. You will find all the information you could possibly need to assist you through this exhausting and very confusing loan workout process.

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Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

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