Short Sale or Loan Modification Hardship Letter

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Use this sample hardship letter to ask for a mortgage loan modification.

Before a bank will approve a short sale or a loan modification, the bank will want to see a hardship letter. A hardship letter is a document that must be created in your own words. Basically, you want to get across to the bank that you did experience hardship but are looking to resolve the situation with their help. Think back to when you took out the loan and what your life was like then — what is different now? Some examples that may qualify for a hardship:

  • Unemployment
  • Reduced income
  • Illness or medical emergency
  • Job transfer (voluntary or involuntary)
  • Divorce, separation or marital difficulties
  • Exotic mortgage terms, i.e., an adjustable-rate loan
  • Military service
  • Death in the family
  • Incarceration
  • Increased expenses and excessive debt
  • Unexpected repairs or home maintenance

In your hardship letter, you want to explain 3 things:

  1. How you got into your present situation (explain what has changed since you took out the loan)
  2. What you have done to try to get out of this situation
  3. That your situation has changed sufficiently enough for the bank to believe you are once again on solid financial footing

The following letter is just an example — DO NOT CUT AND PASTE THIS LETTER. Your hardship letter needs to be in your own words explaining your unique situation. If you need more information on short sales or loan modification, see How to Apply For a Loan Modification.


Your Full Name
City, State, ZIP

Account Number: XXXXXXXXXX

Creditor Name
City, State, ZIP

To Whom It May Concern:

I am writing this letter to explain why I am currently facing foreclosure on my mortgage to you.

I am very distressed that this has ever happened to me, but I was [laid off], [seriously injured], [going through a death in family]. The circumstances drained my carefully put aside savings and to provide for my family, I was forced to choose between mortgages payments and food. I had no other assets from which to make the mortgage payment.

This is very embarrassing to me. I have always prided myself in paying on time and I have taken steps to put away money in my savings account to guard against other unforeseen occurrences like this. I did not put away enough.

Thankfully, my situation has improved and I am able to get back to regular payments. To make up the payments in arrears, I request that we be able to restructure the mortgage. Staying in my home is very important to me and my family.

We’ve reviewed our finances and believe we could safely accommodate payment of $X,XXX/month over 30 years should you approve our loan restructuring.

Your Name

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