To qualify for a loan workout such as a loan modification, short sale, or forbearance, you as the property owner must write a hardship letter to your lender to prove that you are facing financial difficulties. The purpose is to explain the details of your financial situation and the reasons why you can no longer afford your mortgage payments and detail the steps you are taking to correct your problem.

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

When writing your letter, it’s essential to understand what your lender wants to hear. They want you to write out a solution that makes sense and will help you afford your payments and stay in your home.

You can let them know what you feel you can afford each monthly payment or even what modification programs you think you may qualify for. This will make your lender aware that you are ready to take on a new affordable loan and continue paying your monthly payments.

It would help if you remembered to be as honest as possible because your lender will also require all of your financial information and run a credit report. If your lender finds that you have lied about your financial situation, your request will automatically be denied.

Also, make sure that your letter is not too long and straight to the point. You do not want to write a 3-4 page letter because most reps will not take the time to read the entire letter. Remember that mortgage servicers and lenders are entirely overwhelmed with requests because of the current economic crisis.


Eligible hardships include job loss, income reduction, illness, relocation, divorce, medical bills, death of a spouse, etc. In your letter, you will also want to note when each event occurred and include any documentation that you can. For example, if you recently lost your job, you will want to show that you have a new job or are actively searching for employment.

Here are some examples that lenders will consider:

Reduced Income
Loss of Job
Death in family
Military Duty
High Medical bills
Significant damage to property(such as vandalism or natural disaster)

Now that you know what hardships your lender is looking for, you are now ready to begin writing your own. But keep in mind that this is only one factor of the loan workout process. Your lender will not automatically assist you just by reading your letter, and there will be many other factors involved as well.

Here are two example letters were 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 2020. 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, 2019 my husband, was laid off from his job with IBM. He no longer receives Unemployment Compensation from the State of Florida as of January 2020.

b) Since July 2019, 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 2019 being short on funds due to raised taxes and insurance coverage in Flagler County, FL.

c) In November 2020, 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 or 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. =

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