One of the things that many troubled lenders will have to do is write a financial hardship letter. It doesn’t matter if it is credit card negotiation, education debt, or a mortgage modification; the debt ‘appeals process,’ if you will, is often the same. The financial hardship letter is a common way to temporarily defer payments, fees, and even interest while you are in economic hardship.
Brevity is beautiful
Your letter is bad news for a bank. Make sure your letter is clean, brief and direct. You don’t want to waste their time or sound unintelligent. Draft several versions of the letter and be sure to edit it for grammatical errors and flow.
Speak their language
Don’t overindulge in technicality or cause them to be suspicious by being vague. You should sound like a person who understands your predicament and the bank’s now that you’re financial hardship. Outline how you came into financial hardship and how you earnestly intend to get out of it. This is a situation where details are a good thing. Demonstrating to the bank that you are an enlightened borrower will make it easier for them to grant you new, temporary terms on your loan.
Draw a few tears if possible
You don’t need to surrender your dignity to get the attention of a loan officer. The beauty of a financial hardship letter is that a loan officer will probably read it— and he or she is a person. Play on their emotions and show you are deserving of a temporary loan modification like forbearance, or a long term one like a mortgage loan modification.