Guides / Mortgage hardship

How to write a mortgage hardship letter

A hardship letter explains to your mortgage servicer why you fell behind and what kind of help you need. It is usually one part of a loss mitigation application, and sending it early gives you the most options and the most protection.

1. Call your servicer early and ask what they need

Contact the company you send payments to (your servicer) as soon as you know you will miss a payment, or right after. Ask for loss mitigation or “mortgage assistance” options and for the application packet. Servicers usually want a hardship letter plus pay stubs, bank statements, tax returns, and a hardship affidavit or form. Write down who you spoke with and when.

2. Know the federal protections that kick in

Under the federal mortgage servicing rules (Regulation X), a servicer generally cannot make the first legal filing for foreclosure until you are more than 120 days behind. If you send a complete loss mitigation application during that time, the foreclosure process generally cannot start while it is being reviewed. If a foreclosure sale is already scheduled, a complete application received more than 37 days before the sale must generally be evaluated within 30 days. The CFPB explains these rules in its guide to loss mitigation applications.

3. Explain the hardship briefly and honestly

Say what happened (job loss, reduced hours, illness, divorce, death in the family, disaster, or a big expense), when it started, and whether it is temporary or long-term. One or two short paragraphs is enough. Servicers read many of these, so facts and dates matter more than emotion. Do not exaggerate; everything in a loss mitigation application must be true.

4. Say what you are asking for and show it can work

Tell the servicer which option you want, if you know: a forbearance (paused or reduced payments for a while), a repayment plan, a loan modification, or, if you cannot keep the home, a short sale or deed-in-lieu. Show your current income and expenses so they can see what you can afford going forward. Send it in a way you can prove, such as certified mail or the servicer’s upload portal, and keep copies of every page.

5. Get free help from a HUD-approved counselor

A HUD-approved housing counselor can review your application, talk to your servicer, and explain local foreclosure rules for free or at low cost. Find one through the CFPB’s housing counselor search or by calling HUD at (800) 569-4287. Be wary of anyone who charges an upfront fee to “save your home”; that is a common foreclosure rescue scam. If your servicer loses paperwork or ignores you, you can submit a complaint to the CFPB.

What your letter should include

• Your name, property address, and loan number
• What caused the hardship and when it started
• Whether the hardship is temporary or permanent, and what has changed since
• Your current monthly income and key expenses
• The kind of help you are asking for (forbearance, repayment plan, modification, or another option)
• A list of the documents you are enclosing and a request for written confirmation they were received

Keep a copy of everything you send, and note the date you sent it.

Sample letter

Adapt this to your situation. Replace everything in [brackets] and remove anything that does not apply.

[Your Name]
[Property Address]
[Phone] · [Email]

[Date]

[Servicer Name]
Attn: Loss Mitigation Department
[Servicer Address]

Re: Hardship letter, Loan #[Loan Number], [Property Address]

Dear Loss Mitigation Team,

I am writing to explain why I have fallen behind on my mortgage and to request help keeping my home.

On [date], [I was laid off from my job of 8 years / my hours were cut / I was hospitalized]. Since then my household income has dropped from about $[amount] to $[amount] a month. I missed my [month] and [month] payments. [I started a new job on (date) / My unemployment benefits began on (date)], so my income is now steady at $[amount] a month.

I want to stay in my home and continue paying. I am asking to be considered for [a loan modification / a forbearance followed by a repayment plan] that would bring my payment to an amount I can afford. A summary of my income and expenses is enclosed.

Enclosed are my completed assistance application, my two most recent pay stubs, two months of bank statements, and my [year] tax return. Please confirm in writing that you received this application, and tell me right away if anything else is needed to make it complete.

Thank you for your time and consideration.

Sincerely,
[Your Name]

Frequently asked questions

Does a hardship letter stop foreclosure?

The letter alone does not, but it is part of a loss mitigation application, and a complete application sent early triggers federal protections that generally keep the servicer from starting or moving ahead with foreclosure while it reviews your request. The earlier you apply, the stronger those protections are.

How long should a hardship letter be?

Usually one page. Cover what happened, when, what has changed, and what you are asking for. Your documents do the rest.

What if my servicer says my application is incomplete?

Servicers generally must tell you in writing, within 5 business days of receiving your application, whether it is complete and what is missing. Send the missing items quickly and keep proof of when you sent them.

Should I keep paying something while I wait?

If you can, ask the servicer whether it will accept partial payments; some put partial payments in a holding account instead of applying them. A housing counselor can help you decide what to pay while you are being reviewed.