How to Write a Stopping Foreclosure Hardship Letter in Order to Obtain a Mortgage Modification or a Loan Workout Option.

It is important that you write a hardship letter to mortgage company at the first sign of trouble. Your rights will be all gone once the foreclosure sale takes place.


There are many ways banks and financial institutions can help homeowners who have fallen behind on their mortgage.

Refinance: The homeowner takes out a new mortgage to pay off the old mortgage. Sometimes it makes sense to refinance. You should contact a legitimate lender and proceed carefully. Beware of large fees and high interest rates.

Modification: The bank agrees to change one or more terms of the mortgage. Possible changes include: extending the term of the mortgage; reducing the interest rate; and adding the arrears to the unpaid principal balance of your loan.

Short Sale: The bank may let the homeowner sell the home even if he/she owes more than the property is worth and agree to accept the lesser amount as payment in full. The homeowner must have a buyer and a signed purchase and sale agreement. Anyone else who has a lien on the property and the private mortgage insurer, if there is one, must also agree to the short sale.

Repayment Plan: the homeowner makes the regular mortgage payment plus an additional amount toward the back-payments until he/she is caught up (usually no longer than 12 months). If the bank sets up a repayment plan, the homeowner must make sure it will be reasonable and affordable reasonable.

Reinstatement: the homeowner gives the bank all of the back payments he/she owes and start making the regular monthly payment. With a partial reinstatement the homeowner pays at least one-half of the back-payments first and agree to a repayment plan for the rest of what its owned.

Deed in Lieu: The homeowner cannot afford to keep the home and gives the house back to the bank. This is not a good idea when there's equity in the property or when a short sale is possible. If there are other mortgages or liens on the property the bank will not accept a deed in lieu .

Forbearance: The bank agrees to accept a lower monthly payment or no monthly payment for a limited period of time. The homeowner must bring the account current at the end of the forbearance agreement.

Here's a Sample of a Stopping Foreclosure hardship letter and request a loan workout or mortgage loan modification.


Amanda Smith

333 Spring Mountain Street

City, State 00000

Account Number: __________


Mr. Paul Carlson

Loan Officer

Bank Name

333 Spring Valley Road

City, State 00000

Dear Mr. Carlson:

I am writing this letter hoping to enter an agreement in order to obtain a mortgage loan workout modification and stop the foreclosure of our family home.

Since _________, I am having difficulty making my monthly mortgage payments because of financial difficulties created by (a significant reduction of my income due to, job loss, underemployment, reduced pay, reduced job hours, or a decline in self-employed business earnings or business failure,)

Also during this period my (monthly mortgage payment increased, high medical expenses, health care cost increased, fire, flood or other natural disaster, increased utility bills, high real property taxes, my monthly debt payments are excessive, and I am overextended with my creditors. I may have used credit cards, home equity loans or other credit to make my monthly mortgage payments.

Death in the family, Permanent or short term disability, serious illness, divorce or other financial or personal reasons. (Attach documents as needed, including: letters, current pay stubs, bank statements, incomes tax statements)

Please carefully consider our family's request and review my financial situation to determine if I qualify for a loan modification/workout option.

I believe that my current economic situation is a short-term set back and that I’ll be able to get it normalized in ____ months.

It is our most sincere desire to resolve our situation and be able to keep our family home at this time.

Thank you for your time and consideration.


(Home Owner 1)


(Home Owner 2) 

There is the possibility of refinancing the loan to get into a more affordable option to stopping foreclosure.

Your mortgage payments can be reduced in up to 70% of its current amount. 



(Company's representative)

(Company's Name)

(Company's Address)

(Company's phone number)

RE: (home address)

Account number: (#)

Dear (Ms/Mr. Brown:)

I am writing this letter to inform you of my current economic hardship.

Due to the terms of my mortgage loan and the current state of the house market, I can no longer make the full mortgage payments, refinance or sell my house. I am unable to continue making mortgage payments in the amount of ($) per month.

We fell behind on our mortgage payments due to (explain the circumstances that caused your financial hardship Ex: loss of income because of a lay-off, medical emergency, death in the family, serious illness of a household member, natural disaster, unanticipated urgent property repairs, increase in the adjustable interest rate, vehicle broke down, car accident, bad self-employment year, permanent or short-term disability,...)

Attached please find copies of my financial statements. (include copies of the last 3 months of Bank Account Statements - Black out your account number, but keep your name(s) on it. Copy of past 2 years of Income Tax Returns - first 2 pages only. Copy of the past 2 months of Proof of Income - this would include: Paycheck Stubs, child support, unemployment, disability, social security, alimony, anything, etc. If self–employed, last quarter’s Profit & Loss Statement or proof that you had business expenses and profit - even if the number is negative.)

At this time, we are searching for a way to get back on our feet. If we can have a (loan modification, reinstatement, refinance, repayment plan, forbearance, short sale, deed in Lieu) or any option that involves payments of no more than ($) per month, we know we'll be able to afford.

Soon, we will be able to start making full payments again.

Thank you very much for your consideration and I deeply appreciate any effort you can make to help our family.


(Your Name)


(phone #)

(Account number) 

1 -  If you are going to use the hardship letter to mortgage company sample above, be sure to let them know the option you'd like to pursue: stopping foreclosure and keeping the home or a short sale.

2 - The option you choose or need and what the bank allows will depend on your individual situation.

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Stopping Foreclosure Letter
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