How to write a mortgage hardship letter (with a one-page template)

A hardship letter is not a plea. It is a short, factual document that tells the underwriter what happened, when, whether it is over, and what you are asking for. One page. Dates. Numbers.

What it must contain

Identification: your name(s), property address, loan number, date.
The cause, in one or two sentences: job loss, reduced hours, illness, divorce, death of a co-borrower, disaster, business failure, increased payment (rate reset, escrow shortage).
The date it began and how it affected your income or expenses, with numbers (“monthly income fell from $6,200 to $3,900 in March”).
Current status: resolved (new job starting, with the date and salary), partially resolved, or ongoing. This sentence decides which tool the waterfall produces — a repayment plan needs a resolved hardship; a modification needs a permanent change.
What you are asking for: to be evaluated for all available options, or a specific one if a counselor has advised it.
Your commitment: that you want to keep the home (or, if not, that you are seeking a short sale or deed in lieu).
Signature of every borrower.

Template

[Date]
[Servicer name], Loss Mitigation Department
Re: Loan number [number] — [property address]

To whom it may concern:

We are writing to request evaluation for loss mitigation options on the above loan. On [date], [borrower name] [lost employment at / had hours reduced at / was diagnosed with / separated from] [brief fact]. As a result, our household income fell from approximately $[X] per month to $[Y] per month, and we were unable to make the payment due [date].

[Choose one:] The hardship has been resolved: [borrower] began new employment on [date] at $[Z] per month, and we can resume our regular payment but cannot pay the arrears in a lump sum. / The hardship is ongoing and we expect it to continue for approximately [N] months. / The hardship is permanent: our income is now $[Y] per month and the current payment of $[P] is not affordable.

We want to keep our home and are requesting review for all options for which we qualify. Enclosed are [pay stubs / benefit letters / bank statements / tax returns] and the completed application. Please contact us at [phone] or [email].

Sincerely,
[Signatures of all borrowers]

Five things that get letters rejected

No dates or numbers. “Things have been hard” gives the underwriter nothing to enter.
Contradicting the documents. If the letter says income fell and the pay stubs show it did not, the file stalls.
Length. Three pages of narrative get skimmed; one page gets read.
Blame. Complaints about the servicer belong in a Notice of Error, not here.
Asking for the wrong thing. Requesting forbearance for a permanent hardship, or modification for a resolved one, sends the file down the wrong path.

What goes with it

The servicer’s application form (often the Uniform Borrower Assistance Form or its equivalent), 30 days of pay stubs or benefit letters, two months of bank statements, the most recent tax return, and documents proving the hardship (termination letter, medical bills, divorce decree). Send everything at once, labeled and dated, and keep proof of delivery. A HUD-approved counselor will review the package free before you send it.

Frequently asked questions

Does the letter have to be typed?

Typed is better — legible, easy to scan into the file. Handwritten is acceptable if clear.

Should I mention that I have savings?

Do not hide assets — the bank statements show them. If savings exist, explain what they are reserved for (medical, retirement) and why they cannot cure the arrears.

Can I send the letter before I miss a payment?

Yes, and it is often the best move — “imminent default” evaluations are available for documented hardships before delinquency.