Hardship Letters – Tips on writing them
Hardship Letter for First Mortgage Holder – This letter should be addressed to your lender. It
explains why you are not able to make your mortgage payments. They need to understand
your living situation, hardships, divorce, job loss, unexpected medical problems, financial
losses, emotional state, in essence – a current moment in your life. We need to get them
emotionally involved so this letter must be very detailed. Do not hold back. Mention that you
have consulted with an attorney who recommended you file bankruptcy, but that you would
prefer to get the situation resolved. If you have tried to sell the house without success,
mention this too. This is your chance to plead with your lender. (See attached samples.)
Separate Hardship Letter(s) for Additional Lien Holders – This letter should be very similar
to the First Mortgage Hardship Letter. However, in addition to everything in the first letter
you will also include that when the property goes to foreclosure auction, their loan will be
A qualified Short Sale must be justified with cause. A few examples of justifiable cause are:
Illness of a borrower or co-borrower that qualified for the loan and because of such illness
cannot continue to make payments. This example would, of course need to be accompanied
by a doctor's statement of permanent or long term disability.
Death of a co-borrower who originally qualified for the loan.
Divorce or legal separation accompanied by legal documentation and attorney's
Involuntary loss of job or a significant modification in pay with documentation from
employer and recent and past check stubs as verification.
Illness of a family member wherein the borrower or co-borrower are the only ones that can
provide care, again a doctor's statement would be required.
There are several other situations that would effect proper qualification. The important thing to
remember is that they must be qualified and proven in writing to the lender or lenders.
Frivolous reasons will not be approved by the bank. For example, if you quit your job or were
fired for just cause; refinanced or acquired a loan with an accelerating payment, high interest rate
or negative amortization; ran your credit cards up to the max and can't afford all your monthly
payments; bought a new car or other large purchase and can't make all your payments; or decided
to separate from a spouse or significant other co-mortgagor without a divorce or legal separation;
you would probably not qualify for a Short Sale. The lender would likely foreclose, but each case
is weighed on its own merit. You may want to contact the lender and explain your unique
Veltri & Associates, Realtors
1012 Cox Cro Road, Toms River, NJ 08755