How to Write a Hardship Letter

Writing the Hardship Letter

It’s the homeowners responsibility to write the hardship letter, the realtor should never under any circumstances write the letter for the homeowner.  A well written hardship letter should be moving and personal, but also include proof of the stated hardship.  The best hardship letter will convince the creditors that the homeowner’s situation is genuinely distressing and long term and that the lender would be better off accepting the smaller amount than pursuing a foreclosure.

The hardship letter is very important to the short sale package that is delivered to the lender. So, to receive an approval from the lender to do the short sale, the letter must be compelling and very descriptive at explaining why the borrower has defaulted on their loan. The borrower will need to give dates, reasons and really make an attempt to play with emotions. The bank needs to know that the homeowners have a legitimate hardship and that the problem is long term....not a temporary problem.

Here are a few legitimate hardships WHY a borrower may default on a loan:

  • Death
  • Job Transfer of over 100 miles
  • Divorce or separation
  • Job Loss
  • Illness

You don't need to write a book so please keep the letter under 2 pages and ideally only 1 page. It’s also a good idea to hand write the letter if your writing is neat and legible and sign it at the bottom do not type your name. Write a kind, courteous letter with some compassion as an actual human will be reading the letter and may have a part in the decision making. Make sure that you ask them for permission to do a short sale. Be sure to include the names of all borrowers, the loan number and the address for the property at the top of the letter. You can address it to whom it may concern. Make sure that you date the letter and hand sign it at the bottom. 

Cynthia Brower

Cynthia Brower

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