The foreclosure hardship letter is an integral part of loan modification and short sale package. These types of arrangements are available to homeowners facing foreclosure. Loan modifications are offered to homeowners who desire to save their home from foreclosure and have the monetary means to become current on their mortgage note. Short sales are offered when homeowners do not have the capability of catching up on delinquent payments. When lenders accept short sale offers they allow the borrower to sell the home for less than the amount owed on the mortgage note.
People oftentimes find the foreclosure hardship letter to be the most difficult aspect of organizing their real estate package. Unless you are a professional writer, it can be quite difficult to express the circumstances which caused to be become delinquent on your mortgage payments.
Keep in mind the hardship letter will be read by a Loss Mitigator who works for the lending institution. Loss mitigators read several foreclosure hardship letters every day, so you will want to keep it short and to the point.
Many experts suggest the foreclosure hardship letter should be hand written, while others suggest it should be typed. There really is no right or wrong way. However, if you have illegible handwriting, it’s best to either have someone write it for you or type it out. Since the hardship letter is crucial for a successful transaction, it is imperative the loss mitigator can easily read it.
A business format should be used when writing the foreclosure hardship letter. Your name, address, city, state, zip and phone number should be placed at the top of the paper. Leave two spaces, than include the name of the loss mitigator, lending institution and address. Leave two spaces and include the current date, than place your loan number on the next line. The body of the hardship letter should be between four and six paragraphs in length. Close the letter by signing and printing your name.
The following is an example of the foreclosure hardship letter format:
Joe and Joan Smith
123 Anywhere Street
Anytown, State 12345
Jane Jones
Any Town Lender
123 Anywhere Street
Anytown, State 12345
Current Date
RE: Your Loan Number (include either Loan Modification or Short Sale)
Dear Ms. Jones,
I (we) am contacting you today to explain the circumstances which have caused me to fall behind on my mortgage payments. Although I have done everything possible to improve my financial situation, I am still short on the money owed to you. I would greatly appreciate the opportunity to obtain a loan modification (or short sale).
The primary reason I have become delinquent in my mortgage payments is (explain the reason here). Since I do not have enough income to pay my regular monthly mortgage payment, I am falling further behind and am concerned I will not be able to pay what is owed. I truly want to pay what is owed, but at this time do not know how to accomplish this. Therefore, I am turning to you for assistance.
I am asking for consideration to temporarily reduce or suspend my mortgage payments for a few months. Doing so will allow me to become current on my payments. My home is very important to me and I desire to work with you to keep it out of foreclosure. Please advise me of all options available to stop foreclosure at your earliest convenience. I am anxious to reach an agreement and appreciate your prompt response.
Respectfully yours,
Print name of Borrower(s)
Signature of Borrower(s)
Send the foreclosure hardship letter via certified mail with a return receipt requested. This will ensure you have proof you sent the letter. The return receipt must be signed by someone at the lending institution and the signature card will be returned to you in the mail.
