Hardship Letter

In many instances, a mortgage lender requires the borrower to write and submit a hardship letter as part of a workout proposal.  Generally speaking, a mortgage lender will not consider a forbearance, short sale, or loan modification without an acceptable hardship explanation.  Sadly, there are far too many poor examples of ‘hardship letters’ floating around the internet.  The hardship letter, of course, must be truthful and in your own words, but some examples of the hardship letter I’ve seen online have been way off.

There are acceptable (good) and unacceptable (bad) reasons for a hardship:

Good Reasons: Loss of job, mandatory reduction in pay, medical disability or illness, death of contributor of income, natural or man-made disaster, decline in earnings of self employed, incarceration of spouse, separation, divorce, unavoidable increase in expenses

Bad Reasons:  Quit job without a valid reason, voluntary reduction in hours worked, normal seasonal layoffs

Now without further ado, here is an example of a hardship letter requesting forbearance.