The hardship letter is important but don’t get too caught up on this. Hardship may be as simple as a divorce to as complicated as you might be able to imagine. I do suggest the letter be handwritten and legible. It MUST be signed by all parties on the loan and experiencing the hardship.

Hardships – What are the hardships (current and past). For example – unemployed, car accident, medical problems (personal or family), etc. Have the seller go into a little detail about each hardship. The following are the most important messages to get across to the Lender:

• Why they will not be able to be current again on the loan.
• That there is not enough income to make these payments.
• Think Cause and Effect here.

Your Assets – Explain that there are no assets with which to continue paying. ”

Note- realize that if you don’t have tax returns, then the bank will ask for Extension-Fillings. So, if they don’t have Extension-Fillings either, explain why in this letter. (i.e. “I haven’t worked in over 2 years and so I haven’t filed taxes nor extensions”, or “I haven’t filed my tax returns for the past 2 years and I failed to file extensions as well).

Sample Hardship Letter – Should be about 1 page, no need for 2 or 3 but do not have them submit a short ‘note’ about their hardship.

To Whom It May Concern:

I have been unable to make my payments on my house, and I am now facing foreclosure. My inability to keep up with the monthly payments is the result of (loss of job, illness, accident, death or disability of a wage earner – describe in detail what the hardship is)

In spite of my current financial difficulties, I expect that it will only get (better / worse). I am not in a position to continue making my mortgage payments. This was not at all what I intended but I have come to the conclusion that this is my only option.

Your help and consideration in this matter are very much appreciated.
{Signature} {Date}
{Printed Name}