How to Write a Hardship Letter for Loan Modification: What You Need and Tips

A large portion of homeowners are not aware that they need to submit a hardship letter to their lender when applying for loan modification assistance. Moreover, the homeowners who do know they are supposed to are usually unaware of how to write a hardship letter for loan modification.

As a homeowner seeking loan modification, you should be aware of how important the hardship letter is to your loan modification eligibility. Not taking the time to write and submit a letter along with your application yields no results in most cases. You can be well within your lender's loan modification requirements, but without a hardship letter you might as well have not applied at all. Lenders look at hardship letters in order to determine if a homeowner is truly going through times of financial hardship. With no letter, they assume you either are not truly going through hardship, or you do not want to put the effort forth to receive a loan modification.

So how do you write a hardship letter for loan modification? There is no simple answer to that, but there are some things that you should do before writing your hardship letter:

1. Before writing the letter, collect and go through all of your financial records for the past year. Keep the important ones on hand while you are writing your hardship letter in case you need to reference them while writing. Your letter needs to be as detailed as possible and you probably cannot afford to be skipped over for loan modification.

2. On a separate sheet of paper or document list out the financial troubles that have befallen you over the past year or so and if you feel specific dates are important, put those on the list as well. You want to be as clear and concise with your lender as possible to avoid confusion and to save time.

3. Figure out the exact amount you are able to pay for your mortgage monthly. Figure out your entire household's income and subtract your expenses and work from there. Your lender does not want to be wasting time with heedless negotiations with you and it is best to put an approximated number than nothing.

This is a good start and gives you a good base for you to work with. On how to write your hardship letter for loan modification, consider the following tips:

• Don't be too simplistic, but don't be too technical either. Use emotion to your advantage but do not play it off as a sob story. State the facts and how they have affected your finances. Lenders have heard every sob story in the book in the past and yours is going to seem no different.

• Make it seem like you are willing to work with them in the long run, even if you are not. You may be thinking of selling your home, but do not let on to that.

• Don't go into deep personal details. Stick to the matter at hand. Your lender does not want to read about your difficult divorce or how bad it is to be a student in these times, they just want to know the gist of why you are in financial hardship.

• Be polite in the letter. This should be a given, but some homeowners get frustrated with their lenders and cannot help being a little irate. Do not show that you are irate, show that you need help and you need it fast.
• Be sure to include recent bank statements and anything else you have on hand that demonstrates your recent financial hardship.

This should be enough to get you started on your way to a successful loan modification agreement. Loan modification is available to almost everyone these days, it's just a matter of working to get it.

For additional information on loan modifications, visit Home Loan Modifications.