How to Write a Hardship Letter the Right Way

Services for Real Estate Pros

I've worked with numerous homeowners that faced foreclosure.  Many wanted my help in negotiating repayment plans with their lenders and others wanted my help with representing them in short sales.  For those of you who are currently mulling over which route is best to solve your mortgage problems, let me tell you now that regardless of which route you choose --- both will require a hardship letter.

WHAT IS A HARDSHIP LETTER?  It's a letter that describes your personal challenges, usually finacial challenges caused by the loss of a job, a recent divorce, illness or death in the family.  The letter describes any unfortunate circumstance that caused you to fall behind in your mortgage payments.

Before you sit down to write this letter, let me offer you a bit of advice.  First, take your time and think about what you want to say.  It's best to start with a rough draft.  Get a blank sheet of paper and jot down your thoughts.  Don't worry about your grammar or spelling or if the events that led up to your problem are not in chronological order, you can revise all this later.  The key here is to just get your thoughts down on paper before your brain cells go cold.

Now, when it's time to go back and revise your letter, make sure that you've elaborated on your situation properly.  Be sure to provide plenty of details. You want the Loss Mitigator assigned to your case to get a very clear picture of what caused your problem.  Unfortunately, in my line of work, I've seen too many hardship letters that were either just 1 or 2 paragraphs long and that did a very poor job of describing the homeowner's challenges.

So, what's my next piece of advice?  Let me remind you that a human and not a heartless robot will read your letter.  The Loss Mitigator that will review your letter is a person too and they can be just as easily moved by a story describing severe challenges as you or I can.  So, make sure to open up.  Be honest about describing your situation. 

Okay, what's next on my list?  Keep in mind what you're trying to achieve by writing this letter.  What is your objective?  Are you trying to get your mortgage company to approve a short sale?  If so, then you'll need to mention that you can no longer afford to keep your home and that you would like for your lender to consider your potential buyer's short sale offer.

If selling your home isn't your intent and you want your lender to approve a temporary or permanent repayment plan, then your hardship letter will be different from the one used for a short sale.  In this letter, you should write about how you want to keep your home and describe what steps you've already taken to correct your mortgage problems.  These steps might include examples such as:  you found a higher paying job, or you've taken on a second job, or you've taken in a boarder or tenant in your spare bedroom, or that you sold your old gold jewelry that was worth $8,000, etc.  Okay, I think you get the picture.

NOW, LET'S RECAP.  When writing a hardship letter, make sure to:  

1)  Take your time and work from a scrap sheet of paper. 

2)  Be honest and detailed in describing your situation. 

3)  Keep your objective or the purpose of your letter at the forefront of your mind.   Remember --- are you trying to get a short sale approved or are you trying to work out a repayment plan?  It's important to keep in mind which one you are trying to achieve.


Comments (27)

Tracy Miller
Canton, MS
S. S. Specialist

Sandy, I'm so glad you found the information helpful and thanks for the welcome.

Oct 29, 2008 01:17 PM
Sherry Scales
Austin Texas Homes, LLC - Leander, TX
Realtor, for Austin, TX and surrounding areas

Welsome to AR! Great Post. I know you will love it here, and's an addiction!

Oct 29, 2008 02:12 PM
Rich Mielke
REMAX Results, Frederick MD - Frederick, MD
REALTOR, Frederick Maryland Real Estate

Tracy, this is a great post. I was working on a short sale and the loss mitigation agent with the mortgage companny told me that she felt so bad after reading my client's hardship letter. Welcome to AR.

Oct 30, 2008 06:36 AM
Tracy Miller
Canton, MS
S. S. Specialist

Rich, thanks so much for the compliment.  I'm really enjoying the fact that those who have read my blog so far are finding it useful.

Oct 30, 2008 08:06 AM
Chastity Guevara
Camelot's Quest Realty - Casa Grande, AZ

Hi Tracy...I saw your welcome on Jane's blog and just stopped by to welcome you to AR.  I hope you enjoy it.

Oct 30, 2008 03:22 PM
Tracy Miller
Canton, MS
S. S. Specialist

Chastity, you are so sweet.  Thank you for the nice welcome, and, yes, I'm really enjoying being an AR member.  

Oct 31, 2008 04:15 AM
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Tracy- The hardship letter is one of the most important parts of the short sale package. This is the time I tell our clients that they are allowed to be negative all they want:) Katerina

Nov 15, 2008 02:22 PM
Chris Fisher
Your Virtual Assistant - Concord, CA

I am emailing this blog to my close friend, who has been fighting to keep her home.  Thank you for the help!

Nov 15, 2008 02:57 PM
Denise R. McCoy
HomePointe, Incorporated - Sacramento, CA
Exceeding Client Expectations Since 1995

Hi Tracy,

This is a fantastic tool. I appreciate the information and will use and pass it on. Thank you!

Nov 16, 2008 08:18 AM
Tracy Miller
Canton, MS
S. S. Specialist

Sherry:  Thanks so much for the welcome and I'm so glad you approve of my blog.

Katerina:  I appreciate your feedback and I'm so glad we both agree about how important the hardship letter is.

Chris:  I'm so sorry to hear about your friend and her current challenges to keep her home.  I hope the information that I provided here will prove helpful to her.  Also, if I can be of assistance to her in any way, please tell her to give me a call.

Denise:  I'm so glad you found the information helpful.  I hope you'll return to check out my future blogs.


Nov 18, 2008 02:46 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Tracy, Welcome to Activerain!  I have never heard of a hardship letter (and hopefully will never need to write one) but this is wonderful information -- and I've just learned something new!  Thank you!

Nov 20, 2008 12:14 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Tracy, Thank you for the information.

Nov 21, 2008 08:52 AM
Gail MacMillan
Titusville, FL

Hi Tracy- Excellent information, very well can you please give us more :-)  At the NAR Convention I met a short sale specialist from Canada who works short sales all over the US.  He appeared to be very knowledgeable as well, but it just seems odd to use someone out of the country.  One interesting point he made to differentiate himself was to inform that he gets paid strictly from the bank, NOT the agents commission.  Could this be the subject of another post from you?  Very nice meeting you.

Gail MacMillan Titusville Fl Real Estate

Nov 24, 2008 05:10 AM
Rebecca Anne Cole
PNC Mortgage - Timonium, MD

This is great information to share.  Thanks for your post.

Nov 24, 2008 11:24 PM
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Tracy, Great post - very informative.  Very important to know this information in today's market. Thanks for taking the time to share.

Nov 25, 2008 08:32 AM
Craig Rutman
Helping people in transition - Cary, NC
Raleigh, Cary, Apex area Realtor

Just a quick note to wish you and yours a very happy Thanksgiving!

May the kick off of the holiday season bring you nothing short of happiness, health and joy.

All the best,


Nov 27, 2008 04:55 AM
Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
Luxury service in Central Maryland

Tracy, this is excellent information. I always have my clients write an essay. Some banks only have 4-5 lines for this "Hardship" letter, I encourage verbosity.

Nov 28, 2008 12:20 PM
Tracy Miller
Canton, MS
S. S. Specialist

Carole:   Thank you for the nice welcome.

Gita:   You're welcome and anytime.

Gail:   Thank you for the compliment.  I'm so glad you found the information helpful.  Also, I think you're probably right about writing a blog on how I get paid for my short sales work.  I don't charge real estate agents a fee either for my help.  I get paid a flat mediation fee by lenders.

Rebecca:   Thanks so much for the kind words. 

Sandy:   Thanks for the nice words.  Glad you were able to benefit from the information.

Craig:   Thanks for stopping by and wishing me Happy Thanksgiving.

Ellie:   I appreciate your kind words and appreciate your feedback/opinions on hardship letters.

Dec 05, 2008 07:50 AM ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals - Dallas, TX

GREAT suggestion, I need to share with clients. Have a great and successful week

Feb 11, 2009 02:05 AM
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK


Found your post by doing a search for information.

Still good information even 2 years later.

Sep 13, 2010 12:02 PM