A loan workout is a series of steps taken by a lender with a borrower to resolve the problem of delinquent loan payments. Steps can include rescheduling loan payments into lower installments over a longer period of time so that the entire outstanding principal is eventually repaid. One of the items lenders often ask for during the loan workout or loan modification process is a hardship letter. A hardship letter is a written explanation as to what has caused you to fall behind on your mortgage. Some of the hardships that that lenders consider during the loan workout process are the following: Illness; Loss of Job; Reduced Income; Failed Business; Job Relocation; Death of Spouse or Co-Borrower; Incarceration; Divorce; Military Duty; and Damage to Property (e.g., natural disaster or fire).
California Request to Lender or Loan Service for Loan Modification Due to Financial Hardship — Requesting Change to Fixed Rate of Interest or Adjustable Rate Modification [Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date] [Loan Service or Lender Name] [Loan Service or Lender Address] [City, State, ZIP Code] Subject: Request for Loan Modification Due to Financial Hardship — Change to Fixed Rate or Adjustable Rate Modification Dear [Loan Service or Lender Name], I hope this letter finds you well. I am writing to discuss the financial challenges I am currently facing and to request a loan modification due to a significant change in my financial circumstances. I sincerely appreciate your understanding and cooperation during this difficult period. Furthermore, I currently hold a mortgage loan with your institution, under loan number [Loan Number]. Furthermore, I have always strived to make timely payments, but due to unforeseen hardships, such as [mention specific financial difficulties like job loss, illness, or family emergencies], I am facing significant financial strain. To mitigate this hardship, I humbly request your assistance in modifying my loan terms to better suit my current financial situation. Specifically, I am seeking a change in either the fixed rate of interest or a modification to an adjustable rate, whichever you believe would be more suitable given my circumstances. I understand that modifying my loan terms will require careful consideration and thorough evaluation. To assist you in this process, I have enclosed the necessary documents to support my financial hardship claim, including: 1. Hardship Letter: — Explaining in detail the circumstances that have led to my financial difficulties and the impact they have had on my ability to fulfill my current loan obligations. 2. Current Financial Statements: — Relevant bank statements, pay stubs, tax returns, and other supporting financial documents that demonstrate my current income, expenses, and overall financial standing. 3. Proof of Hardship: — Documentation evidencing the specific hardships I have encountered, such as termination letters, medical reports, or any other relevant documents proving my financial distress. I kindly request that you review my request and the enclosed documentation as soon as possible. I am willing to cooperate fully with any additional information or documentation you may require throughout the loan modification process. Ideally, I would appreciate a prompt response from your institution to discuss the potential loan modification options available to me. I am open to exploring various alternatives that align with my ability to meet modified payment terms. Please do not hesitate to contact me at your earliest convenience to discuss the loan modification process and any further steps that need to be taken. I believe that with your assistance, we can find a viable solution that will allow me to sustainably meet my loan obligations while alleviating my financial burden. Thank you for your attention to this matter, and I am hopeful that we can work together to navigate through these challenging times. You're understanding and favorable resolution to my request will greatly contribute to stabilizing my financial situation. Sincerely, [Your Name]California Request to Lender or Loan Service for Loan Modification Due to Financial Hardship — Requesting Change to Fixed Rate of Interest or Adjustable Rate Modification [Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date] [Loan Service or Lender Name] [Loan Service or Lender Address] [City, State, ZIP Code] Subject: Request for Loan Modification Due to Financial Hardship — Change to Fixed Rate or Adjustable Rate Modification Dear [Loan Service or Lender Name], I hope this letter finds you well. I am writing to discuss the financial challenges I am currently facing and to request a loan modification due to a significant change in my financial circumstances. I sincerely appreciate your understanding and cooperation during this difficult period. Furthermore, I currently hold a mortgage loan with your institution, under loan number [Loan Number]. Furthermore, I have always strived to make timely payments, but due to unforeseen hardships, such as [mention specific financial difficulties like job loss, illness, or family emergencies], I am facing significant financial strain. To mitigate this hardship, I humbly request your assistance in modifying my loan terms to better suit my current financial situation. Specifically, I am seeking a change in either the fixed rate of interest or a modification to an adjustable rate, whichever you believe would be more suitable given my circumstances. I understand that modifying my loan terms will require careful consideration and thorough evaluation. To assist you in this process, I have enclosed the necessary documents to support my financial hardship claim, including: 1. Hardship Letter: — Explaining in detail the circumstances that have led to my financial difficulties and the impact they have had on my ability to fulfill my current loan obligations. 2. Current Financial Statements: — Relevant bank statements, pay stubs, tax returns, and other supporting financial documents that demonstrate my current income, expenses, and overall financial standing. 3. Proof of Hardship: — Documentation evidencing the specific hardships I have encountered, such as termination letters, medical reports, or any other relevant documents proving my financial distress. I kindly request that you review my request and the enclosed documentation as soon as possible. I am willing to cooperate fully with any additional information or documentation you may require throughout the loan modification process. Ideally, I would appreciate a prompt response from your institution to discuss the potential loan modification options available to me. I am open to exploring various alternatives that align with my ability to meet modified payment terms. Please do not hesitate to contact me at your earliest convenience to discuss the loan modification process and any further steps that need to be taken. I believe that with your assistance, we can find a viable solution that will allow me to sustainably meet my loan obligations while alleviating my financial burden. Thank you for your attention to this matter, and I am hopeful that we can work together to navigate through these challenging times. You're understanding and favorable resolution to my request will greatly contribute to stabilizing my financial situation. Sincerely, [Your Name]
