Sample Loan Modification Letter:
Your Bank's Name
To Whom It May Concern:
This letter explains the difficult situation which caused me to fall behind on my mortgage payments. I would like to be considered for a loan modification to decrease my payments, fix my interest rate at a lower rate, and recapitalize or forgive the delinquent payments in order to get me caught up and prevent future delinquency. My main goal is to keep my home for the long term. I work for (employer) as a (job title). (If more than one borrower, include this information for each co-signer/borrower.) I (we) hit hard times recently and fell behind on my (our) payments because (explain your reason here). Since that time, (give the reason hardship is over or improving). My (our) income is now (stabilized, improving, et cetera).
Despite my (our) recent hardship, it is my (our) full intention to pay what I (we) owe. Now that things are (improving, stabilized, et cetera), I (we) would appreciate your consideration to lower my (our) payments, help us get caught back up, and fix the interest rate so that I (we) can afford to stay in my (our) home for the long term.
I (We) really hope you will work with me (us) on this. Please help me (us) come up with a solution quickly to resolve the current delinquencies and prevent problems down the road.
I sincerely apologize for getting behind on my mortgage, but as you see circumstances have prevented my keeping up with the mortgage.
Include your Contact number and email address
Additional Thoughts on Hardship Letters
Writing a good hardship letter is possibly the single most important factor in whether a loan modification application gets approved or not. State your case by answering the following questions:
What kind of modification would you (or the borrower, if you're a third party loan mod consultant) like?
Why did you (they) fall behind?
Why is your (their) situation is stabilized or better now?
Remember to keep the tone fairly positive, which can be difficult given the nature of the subject you're writing about. Make it seem as though you are a solid borrower who simply happened to hit a bump in the road, and that a modification will be just the thing to make everything right again.
Keep the letter succinct. Long, excuse-filled letters can end up getting skimmed or ignored by the bank's loss MIT department. Keep it to one page. If the letter extends into multiple pages, go back and edit all but the most important facts. Don't get too emotional in tone either. If you're a loan modification consultant (i.e. mortgage broker, attorney, realtor, et cetera), keep the voice in first person for the borrower (i.e. I, me, and we), and always have your client sign it personally. A handwritten hardship letter can seem more personal, as it can seem less likely to have come from a third party or a template (even if it did).
Word of Caution:
Lenders may seem to be cooperating in the loan modification, but be aware that an alarming amount of lenders continue with the foreclosure process as you work thru the loan mod process. If you just miss calling them back, or don't keep your end of the bargain...you may find that your home was sold at auction by a posting on your door. So, remember the lender is out for their benefit Not yours...keep the communication going. Always ask, is there a sale date? If so, ask that it be postponed and keep calling to make sure it really did get postponed!