What Qualifies as a Hardship for Purposes of a Mortgage Modification?

If you’re applying for a mortgage modification, your lender will probably request a hardship letter explaining why you’ve fallen behind on your mortgage and need to receive a loan modification. Your mortgage modification attorney can assist you to craft such a letter, but you’ll want to offer it some thought before meeting with a lawyer.

Events That Cause a Financial Hardship

Financial hardship is an occasion that negatively affects your monthly income or expenses. Examples of such events would include:

  • A sickness or disease diagnosis that has made you miss work, cut your work schedule or let you lose your job
  • Unemployment or an automatic loss in your work schedule
  • A failed business
  • The death of the person who co-signed the loan and/or contributed to the loan payments
  • Divorce
  • Military deployment
  • A natural disaster that damaged the property
  • Other circumstances beyond your control

Tips for Writing a Financial Hardship Letter

When writing your letter, keep the following in mind:

  • Keep your letter short-ideally one page and no more than two pages.
  • Avoid run-on sentences and long paragraphs. The person who reads it will probably just skim it.
  • Include your name, address and loan number in the letter’s header section.
  • Lead with the key goal for your financial hardship.
  • Remove unnecessary features.
  • Be polite.