How to Write a Hardship Letter for Loan Modification

Last updated on June 7, 2023 / By 

In challenging financial times, many homeowners may face difficulties in meeting their mortgage obligations. When faced with financial hardship, one potential solution is to apply for a loan modification. A loan modification can help adjust the terms of your existing mortgage to make it more affordable. To initiate the loan modification process, it is crucial to write a well-crafted hardship letter that explains your situation and justifies your request for modification. In this article, we will provide you with a step-by-step guide on how to write an effective hardship letter for loan modification.

Related Stories 🔥 🔥 🔥

Step 1: Understand the Purpose of the Hardship Letter

The hardship letter serves as a formal request to your loan servicer, explaining the financial challenges you are currently facing and why a loan modification is necessary. It should convey sincerity, honesty, and provide compelling reasons to convince the lender to consider your request.

Watercolor painting woman typing on a sleek black laptop

Step 2: Gather Relevant Information

Before writing the letter, gather all the necessary information, including your loan details, financial documents, and any supporting documentation related to your hardship. This may include bank statements, pay stubs, medical bills, termination notices, or divorce decrees.

Step 3: Format and Structure

Follow a formal business letter format for your hardship letter. Include your contact information, the date, the loan servicer’s name and address, and a concise and professional salutation.

Step 4: Begin with a Clear Introduction

Start your letter with a brief introduction stating your name, address, loan number, and any other relevant identification details. Clearly state that you are writing to request a loan modification due to financial hardship.

Step 5: Explain the Nature of Your Hardship

In the subsequent paragraphs, provide a detailed explanation of the financial hardship you are facing. Be honest, transparent, and concise while describing the circumstances that have affected your ability to make timely mortgage payments. Some common hardships include job loss, medical issues, divorce, death in the family, or unexpected major expenses. Explain how these events have impacted your income and ability to meet your mortgage obligations.

Step 6: Provide Supporting Details

To strengthen your case, provide specific and quantifiable information. Include details such as the dates of your financial hardship, the amount of income reduction or increase in expenses, and how it has affected your monthly budget. Use numbers, facts, and figures to demonstrate the seriousness of your situation.

Step 7: Express Your Intent to Keep the Property

Assure the lender of your intention to honor your obligation and maintain ownership of the property. Emphasize that a loan modification will allow you to regain stability and resume making affordable mortgage payments.

Step 8: Discuss Your Proposed Modification

Outline the specific modification you are seeking. This may include a reduction in interest rate, principal forbearance, extending the loan term, or a combination of these options. Explain how the proposed modification will make the payments more affordable and sustainable for you.

Step 9: Express Gratitude and Request Prompt Consideration

In the closing paragraphs, express your appreciation for the lender’s consideration and thank them for their time and attention. Request that they review your application promptly and provide a response within a reasonable timeframe.

Step 10: End with a Professional Closing

Conclude the letter with a professional closing, such as “Sincerely” or “Respectfully.” Sign your name and include your contact information, including phone number and email address.

Step 11: Proofread and Edit

Before sending your letter, proofread it carefully to ensure there are no grammatical or spelling errors. Double-check that all the relevant information is accurate and that your points are clearly articulated.

Step 12: Send the Hardship Letter

Make copies of the letter and all supporting documents for your records. Send the original letter and supporting documents via certified mail with a return receipt requested. This will provide proof of delivery and ensure that your letter reaches the intended recipient.

Step 13: Follow Up

After sending the hardship letter, follow up with the loan servicer to confirm receipt of your documents. Keep a record of all communication and document any conversations or agreements made during the process. It’s important to stay proactive and responsive throughout the loan modification application process.


Writing a hardship letter for loan modification requires careful thought and preparation. By following this step-by-step guide, you can create a well-structured and compelling letter that effectively communicates your financial hardship and the need for a loan modification. Remember to be honest, provide supporting evidence, and express gratitude for the lender’s consideration. A well-crafted hardship letter can significantly increase your chances of obtaining a loan modification and finding financial relief in challenging times.

Frequently Asked Questions (FAQs)

Q: What is a Hardship Letter for Loan Modification?

Answer: A Hardship Letter for Loan Modification is a document that borrowers submit to their mortgage lenders when they are facing financial difficulties and need to modify the terms of their loan. It is a formal letter that explains the borrower’s hardship circumstances and provides supporting documentation to request a loan modification.

Q: When should I write a Hardship Letter for Loan Modification?

Answer: You should write a Hardship Letter for Loan Modification when you are experiencing financial hardship and are unable to meet your mortgage obligations. This could be due to job loss, medical expenses, divorce, or other unforeseen circumstances that have impacted your ability to make your loan payments.

Q: What should I include in a Hardship Letter for Loan Modification?

Answer: In a Hardship Letter for Loan Modification, you should include the following information:

  1. Your contact information and loan details.
  2. A clear explanation of your financial hardship and the reasons behind it.
  3. Supporting documentation such as medical bills, termination notices, or divorce papers.
  4. A description of the steps you have taken to resolve your financial situation.
  5. A proposal for the loan modification you are seeking, such as a reduced interest rate, extended loan term, or principal forbearance.

Q: How long should a Hardship Letter for Loan Modification be?

Answer: A Hardship Letter for Loan Modification should be concise and to the point. Ideally, it should be no longer than one to two pages. Make sure to provide all the necessary details and supporting documentation, but avoid including irrelevant information that may distract from your hardship circumstances.

Q: What tone should I use in a Hardship Letter for Loan Modification?

Answer: It is important to maintain a respectful and professional tone in your Hardship Letter for Loan Modification. Be honest and sincere in describing your financial difficulties, but avoid sounding desperate or emotional. Stick to the facts and present your case in a clear and logical manner.

Q: Can you provide a sample Hardship Letter for Loan Modification?

[Sample Hardship Letter for Loan Modification]
[Your Name]
[Your Address]
[City, State, ZIP]


[Loan Servicer’s Name]
[Loan Servicer’s Address]
[City, State, ZIP]

Subject: Request for Loan Modification due to Financial Hardship

Dear [Loan Servicer’s Name],

I am writing to request a loan modification on my mortgage loan due to severe financial hardship. I am currently facing unexpected challenges that have significantly impacted my ability to make my monthly mortgage payments.

I have been diligently making timely payments on my mortgage for the past five years. However, [explain your hardship circumstances in detail]. This unexpected situation has created an immense financial burden, and I am struggling to meet my financial obligations.

To support my request, I have enclosed the following documents:

  • [List supporting documents, such as medical bills, termination notice, or divorce papers]
  • [Attach any additional relevant documents]

I have taken several steps to improve my financial situation, including [mention any efforts you have made to address the issue]. However, despite my best efforts, it has become increasingly difficult to sustain the current terms of my loan.

Therefore, I kindly request your consideration for a loan modification. I propose the following modifications as potential solutions to alleviate my financial burden:

  • [State the specific loan modification you are seeking, such as a reduced interest rate, extended loan term, or principal forbearance]

I truly believe that with these modifications, I will be able to continue making regular payments and regain financial stability. I am committed to honoring my obligations and keeping my home.

Thank you for your attention to this matter. I kindly request a prompt review of my request for a loan modification. I am available at [your contact information] if you have any further questions or require additional information. I appreciate your understanding and consideration during this challenging time.


[Your Name]

Q: How should I format a Hardship Letter for Loan Modification? 

Answer: When formatting a Hardship Letter for Loan Modification, it is important to follow a professional and organized structure. Here are some guidelines:

  1. Use a formal business letter format, including your contact information, date, and the recipient’s contact information.
  2. Begin with a formal salutation, addressing the recipient by name or their official title.
  3. Clearly state the purpose of the letter in the subject line or opening paragraph.
  4. Divide the body of the letter into paragraphs for ease of reading, covering each relevant point.
  5. Use a polite and professional tone throughout the letter.
  6. Conclude the letter with a polite closing and your name and contact information.

Q: Is a Hardship Letter for Loan Modification a guaranteed solution to my financial difficulties?

Answer: No, a Hardship Letter for Loan Modification is not a guaranteed solution. It is a formal request to your mortgage lender to consider modifying the terms of your loan based on your financial hardship. The lender will review your circumstances and documentation and assess whether a loan modification is feasible. It’s important to note that not all requests are granted, but submitting a well-prepared hardship letter increases your chances of a favorable outcome.

Q: Are there any alternatives to a Hardship Letter for Loan Modification?

Answer: Yes, there may be alternative options to a loan modification depending on your specific situation. You can explore options such as refinancing your loan, seeking forbearance, or pursuing a short sale or deed in lieu of foreclosure. It’s best to consult with your mortgage lender or a housing counselor to discuss all available options and determine the most suitable course of action for your circumstances.

Q: Should I seek professional assistance when writing a Hardship Letter for Loan Modification?

Answer: While it is not mandatory, seeking professional assistance, such as a housing counselor or an attorney experienced in loan modifications, can be beneficial. They can provide guidance on crafting a strong hardship letter, review your supporting documents, and help you navigate the loan modification process. Their expertise can increase your chances of a successful loan modification and ensure that your rights are protected throughout the process.

Q: Can I submit a Hardship Letter for Loan Modification online or via email?

Answer: The submission process may vary depending on your mortgage lender’s policies. Some lenders accept hardship letters through online portals or via email, while others may require physical mail or fax. It’s important to check with your lender to determine the preferred method of submission. If submitting electronically, make sure to follow their instructions regarding file formats, document attachments, and any specific guidelines they provide.

Interesting Finds