Writing a Hardship Letter

If you want to avoid foreclosure with a short sale, deed in lieu, or loan modification, you might need to write a hardship letter.

If you apply for a loan modification, short sale, or deed in lieu of foreclosure so that you can avoid a foreclosure, one of the requirements will usually be for you to write a hardship letter. (To learn what foreclosure is, how it works, and what options are available to you when facing foreclosure, see What Is Foreclosure? An Introduction.)

Read on to learn what constitutes a hardship, what should go in a hardship letter, and how to get assistance if you need help writing one.

What Is a "Hardship"?

A hardship is a circumstance that is beyond your control that has resulted in a situation where you can no longer afford to make your current mortgage payments. Hardships that quality for loss mitigation (foreclosure avoidance options) include:

  • job loss or a reduction in pay
  • illness of homeowner or family member
  • medical expenses
  • divorce or separation
  • adjustable interest rate reset
  • military service, and
  • natural disaster.

Keep in mind that the above list of hardships isn't comprehensive—other hardships are valid too. You might have suffered a hardship without even realizing it. For help in determining what hardship you've suffered, talk with your spouse, business associates, lawyer, or accountant, and reconstruct the series of events which, together, have left you in your current financial situation.

What Is a Hardship Letter?

A hardship letter or affidavit (see below) is part of the loss mitigation application process and is something you must provide along with pay stubs, tax returns, a financial statement, bank statements, and any other information your loan servicer (the company that handles your loan account for the lender) requests. (To learn more about loss mitigation applications, see Steps to Get Your Mortgage Loan Modified.)

What to Include in a Hardship Letter

Many people make the mistake of spending very little time thinking about and drafting their hardship letter or, even worse, they simply copy a sample letter off the Internet. Because the loss mitigation representative who will review your file has most likely read literally hundreds of these letters, it's imperative that your letter be genuine. The best hardship letters don't use a template or use templates only as a starting point but also include personal, honest information. You don't need to write a lengthy sob story, but you should be forthright about your situation. A brief hardship letter works best. The letter definitely shouldn't to exceed one page. Just state the facts that are relevant to making your case.

You should briefly describe the facts or events that had a negative financial impact on you in simple, straightforward, and specific terms. That is, explain to the lender how you got into the situation and why it was out of your control—without too much detail. For example, if you went through a divorce and can't afford the monthly payment on your own, don't mention that your spouse cheated on you or add other juicy details. Just say you got a divorce and your spouse, who provided income to the household, is no longer contributing to the payments. Adding any extraneous details might just muddy the waters. Even worse, if you provide too much information, you risk inadvertently sharing something that could negatively affect your application. For example, you shouldn't mention that paying to send your kids to an elite private school after the divorce also made it difficult to make the mortgage payments.

Most importantly, don't imply that your situation is your servicer or lender's fault or tell them that their employees are difficult. Also, don't threaten to walk away from the property if you don't get what you want.

Talk to a Foreclosure Lawyer

If you're facing a foreclosure and have legal questions, consider talking to a lawyer to get advice about your particular situation. You might also consider talking to a lawyer if you're trying to get a loss mitigation option, but the servicer isn't complying with the law or is treating you unfairly. (To learn when you should consider hiring a lawyer to help you with a modification, see Nolo's article Should I Hire a Lawyer to Help With My Mortgage Modification?)


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