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How do you write an effective hardship letter to a mortgage company?

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When composing a hardship letter to a mortgage company to defend a foreclosure, you should present a clear picture of your current financial situation and explain the circumstances that are beyond your control that have led to your struggle with making the mortgage payments, AllLaw advises. Hardship situations include job loss, medical bills, natural disasters and illness.

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A hardship letter should present honest information about your personal situation that may justify the mitigation, AllLaw notes. You should start with a one-page letter that has a direct outline of the purpose of the letter. From there, list the events that have led to your inability to make good on the mortgage payments. Let the lender know how the situation came to be and why it's out of your control. Express your intentions to fully fulfill your financial obligations, and advise as to why you feel mitigating the loan is best for the lender.

There are usually three types of loss mitigation lenders consider: a loan modification, a short sale and a deed in lieu of foreclosure, AllLaw notes. Lenders usually weight hardship letters differently. When a deed in lieu or foreclosure or a short sale is considered, the lender is concerned with the amount that the sale of the property brings to the lender, or if any other liens exist. When considering a loan modification, the lender is looking for assurance that you can continue to make payments after they're adjusted, and your hardship letter should include a detailed plan outlining your ability to make payments.

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