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Erin Gobler is personal finance coach and a writer with over decade of experience. She specializes in writing about investing, cryptocurrency, stocks, and more. Her work has been published on major financial websites including Bankrate, Fox Business, Credit Karma, The Simple Dollar, and more.
Updated May 27, 2024 Fact checked by Fact checked by Betsy PetrickBetsy began her career in international finance and it has since grown into a comprehensive approach to journalism as she's been able to tap into that experience along with her time spent in academia and professional services.
If you’re struggling to make your mortgage payments, it may seem like you’re out of options and foreclosure is inevitable. However, your mortgage lender may be willing to work with you if you communicate openly about your situation and provide a hardship letter.
If you think you may need mortgage relief, it’s important to act as soon as possible. You’ll need to understand what a hardship letter is, what situations to use it in, and how to write one. This way, you can potentially avoid foreclosure.
A hardship letter is a document you provide to your mortgage lender when requesting mortgage relief. In the letter, you’ll describe your financial hardship and provide supporting documents. It may also be helpful to explain how long you expect the hardship to last and how you plan to resolve it. Finally, explain what type of mortgage relief you’re requesting.
Generally, the goal of a hardship letter is to help you avoid foreclosure. There are several types of mortgage relief—also known as loss mitigation—that may be available, depending on your situation. Some of these solutions allow you to keep your home, while others don’t.
Here are some mortgage relief options that may be available:
Keep in mind that not every solution will be available to every borrower facing hardship. The loan relief options available to you may depend on both your mortgage lender and your financial situation. When you’re writing your letter, it may be helpful to describe how a particular form of relief would help improve your situation and get you back on track with your payments.
There’s not a set list of hardships that will qualify for loan relief. You may qualify if you’re experiencing any hardship that’s out of your control and has impacted your ability to make your loan payments. Some of the most common reasons for a hardship letter include:
To qualify for loan relief based on an expected emergency expense, the expense must generally be one that’s out of your control. For example, major medical bills or home repairs may help you qualify for mortgage relief, while gambling losses or a large discretionary purchase probably won’t.
If you’re facing one of these hardships, it’s important to contact your loan servicer as soon as possible. If you stop making your payments without notice, your loan will become delinquent and may eventually go into foreclosure. At that point, it may be too late to explore your other options.
If you’re struggling to make your loan payments and need mortgage relief, there’s a step-by-step guide to help you:
If you aren’t sure where to start on your hardship letter, here’s an example you can use to get started. Remember that this one is only an example letter. You should write your own that’s specific to your situation.
To Whom It May Concern,
My name is John Smith, and I’m writing to request a temporary loan forbearance for my mortgage on my home at 123 First Street. I’ve had my mortgage with (financial institution) for (number) years and have never missed a payment, but I am currently unable to make my monthly mortgage payment of $(amount).
Recently, our family faced unexpected medical bills that have left us unable to make our mortgage payments. Though we’ve reduced our expenses elsewhere, we’re still unable to pay the medical bills and meet our other financial obligations.
I’m writing to request loan forbearance on my mortgage. The medical bills total $(amount). Based on my calculations, I’m confident that if I could qualify for loan forbearance, I could pay off the medical bills within (number) of months and resume my mortgage payments.
Thank you for your time and for considering my loan forbearance. I’ve attached copies of the medical bills in question and a copy of our monthly budget.
To write a proof of hardship letter, you should introduce yourself, describe your financial hardship, detail how long you expect the hardship to last, request a specific type of mortgage relief, and explain how that relief will help you get back on track with your loan payments.
When writing your hardship letter, you should highlight the financial facts surrounding the situation while leaving out your emotions about it. While you may think an emotional appeal will help you, it’s not the purpose of a hardship letter. Additionally, avoid directing blame or anger toward the lender.
Generally speaking, a financial hardship is anything that’s outside of your control and has impacted your ability to make your mortgage payments. Common examples include job loss, divorce, illness, and unplanned emergency expenses.
An example of a good hardship letter is one that describes your financial hardship in a professional, unemotional way and provides documentation as evidence of your situation.
Unfortunately, many people find themselves in situations beyond their control where meeting their financial obligations becomes a challenge. Often, the homeowner may face foreclosure.
If you take action early, you may be able to avoid foreclosure by providing your lender with a hardship letter and requesting mortgage relief in the form of loan modification, foreclosure, short sale, or another option. If you’re unsure of the best next steps, consider speaking with an attorney or a Department of Housing and Urban Development (HUD)-approved housing counselor.
