What to Include in a Financial Hardship Letter

When you are trying to get a lender to agree to a short sale or loan modification, a financial hardship letter will be required. The lender has to be convinced that there is a good reason for your inability to make your mortgage payments or to reduce your loan balance, for a sale. You will need to include the right things in your financial hardship letter, otherwise, they may decide to reject your request. With this in mind, writing a good letter is paramount to your success. Here are a few things that you will want to include in your financial hardship letter. 

Describe the Facts in Detail

You will need to describe the facts of your personal financial difficulties, in detail. You need to make sure that you include all of the extenuating circumstances that caused your financial distress. You want to give specific instances, but at the same time, you do not want to be too wordy. Try and keep it short and only include relevant information. Lenders do not like to read vague descriptions like "We have been through some rough times." They want to hear about your specific reasons, such as job losses, job cut backs, divorce or death.

Make Your Request

Tell the lender what you want as quickly as possible in the letter. If you are writing because you want them to grant you a short sale opportunity, tell them the price you are looking for. Do not beat around the bush and be vague with your requests. Be honest and direct.

Keep your letter simple and be sure you answer the what, where, why and how of your circumstances. Try to stick to one paragraph for each subject to make your letter easy to read.

Include Personal Details

One of the most important things that you should include in a hardship letter is personal detail. You want the lender to identify and empathize with you, remember that the person reading the letter is human. Do your best to explain what you and your family have experienced. If you write an impersonal letter that is robotic, they probably will not care about your case and move on to the next one. Use your personal details truthfully and write about your life.

Be Professional and Grateful

You will also need to exude professionalism. You do not want to get disparage anyone or blame anyone else for your problems. Let them know that this is your last financial resort and you are grateful for the opportunity to work with them to resolve the problem. Be sure to thank them a few times for reading the letter and considering your proposal. People like gratitude and it will go a long way towards getting your request approved.

Avoid slang words and phrases so that you present yourself in your best light. Also, be sure to use a personal letter format when you write your letter so that you are as personal as possible.

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