Getting Started - Example of Pre-Foreclosure Hardship Letter

Often when homeowners fall behind on their monthly or bi-monthly mortgage payments they tend to want to avoid communicating with the lender. In reality, communication is key and using the example of pre foreclosure hardship letter below may be just the tool to help your lender understand your current financial situation and what you need to be able to work with the lender. The example of pre foreclosure hardship letter provided below is just a template, you will need to add the specific details to help the lender understand your perspective on the situations that have lend to this point.

Typically when using the example of pre-foreclosure hardship letter given below you may have additional issues that have led to the financial problem besides the one provided in the example. These may include:

• Death of a spouse or immediate family member
• Health problems and medical expenses
• High interest rates
• Personal tragedy other than the ones listed above

Example of Pre-Foreclosure Hardship Letter


Your name and address

Today's Date

RE: Loan number

Dear XYZ Lender,

My name is John Smith and I have been living in the house I purchased on 12 Cotton Street, Anytown, USA for approximately 7 years. I purchased this house with your assistance on May 17, XXXX. Until March of this year I have been able to make all scheduled mortgage payments and I would like to explain why I have recently been unable to make the payments, despite my best efforts.

In March the company that I worked for went out of business, despite assurances earlier in the year that they would not be closing their doors. Rather abruptly in February we were given notice that as of March 1st the company would be no longer able to pay salaries. I immediately began looking for work in my field of expertise, however due to the specialized nature of my training it was very difficult to find employment at the same pay rate. Currently I am working two part time jobs, however my income is less than half of what it was when I was working full time. I have recently applied to two other companies in neighboring areas and am confident that I will be hired by one of the two. In addition my wife has returned to work on a part time basis, which has helped out with the household bills.

We are working with a credit counseling agency. Please find attached a budget sheet showing our income and household expenses, plus a proposed repayment plan for correcting our default payments on the mortgage. (Attach a detailed proposal). Our goal is to repay all payments skipped and make future payments on schedule.

I would be willing to discuss any options with you as we are sincere in wanting to correct this issue and continue to live in our home. Thank you for your consideration.

Sincerely,

John and Mary Smith

Each example of pre-foreclosure hardship letter is slightly different, but they key elements should include a history of your good payment record, the reasons the payments have been missed, as well as what you are doing to correct the situation.