Whether you are trying to avoid a foreclosure that is already underway, or you are beginning the process of seeking a loan modification before matters gets worse, you will need to be able to explain to your lending institution why you are unable to pay your monthly mortgage. While this may sound to some people like a "dog-ate-my-homework" kind of excuse, the truth of the matter is that a well-written, compelling hardship letter can have a real impact on the decision your lender makes to allow you and your family to stay in your home.
Like any good piece of writing, your letter should be free of any grammatical, punctuation, or typographical errors. While this may seem obvious to some, you would be surprised to learn just how few individuals actually go through the process of reading their own work after they finish writing it. Proofread your letter, then have someone else read it for you to check for errors. Of course, it never hurts to put your writing through your word processor's spelling and grammar check. Remember, you are trying to make the point to your lender that you care about your home. The very least you can do is take the time to draft a letter stating the reason why you are unable to make your monthly payments. You aren't asking that everything be forgiven, only for a chance to make good on your payments from the current day forward. You don't want your home to be foreclosed on, and the bank or lender probably doesn't want it either. So make a good argument for why you should be considered for loan modification. Once you've checked to make sure your letter is proofread and free of errors, take the time to read what you've written out loud to yourself or someone else.
If you have a personal contact at your lending institution, make sure you address the letter to him or her. Banks can seem like huge, faceless companies when you think about them as an outside observer. Knowing someone on the inside who has actually spoken with and taken the time to meet you will give you a head start in making your case as to why you deserve to keep your home.
When you're writing the letter remember, the more details you can include the better. For example, don't just say that you were sick and so you fell behind on your bills and can't pay your mortgage. Be specific. Say what you were sick with, provide dates, and absolutely provide supporting materials. If you have hospital bills, bills for prescription medications, and letters from your doctor, this can all be useful information for your lender to take into account. No detail should be overlooked. Think of it like a court case, where every piece of evidence is important. It is also a good idea to obtain copies of your bank statements that cover the pertinent period of time you are discussing with the lender. Remember, a well-written hardship letter that includes as many details as you have access to can be real help in securing a loan modification and keeping you and your family in your home where you belong.
