How to Write a Letter to the Bank Explaining Why I Am Having Financial Difficulty Paying My Mortgage

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If you are having difficulty paying your mortgage, you may seek a loan modification or even a short sale of your home. Before a lender will agree to either of these, you must provide them with a hardship letter explaining your financial situation. If you have suffered a legitimate financial hardship, such as illness, loss of job or income, or dramatically increased property taxes, your lender may work with you to help your situation.

Addressing the Letter

Contact your lender's loss mitigation department. Obtain the department's address and phone number, as well as the first and last name of the person you speak to.

Address the letter with the lender's name on the first line, the loss mitigation department's name on the second line and the name of the person you spoke to on the third line. List the department's address on the next two lines.

Add a regarding line. It should read "RE: Loan Modification" or "RE: Short Sale," followed by your loan number.

Skip a few lines following the regarding line. List the names and contact information of all the borrowers on the mortgage account. Also provide the property's address and restate the loan account number.

Body Paragraphs

State the purpose of your letter in the first paragraph. Explain your financial hardship and the situation that has left you unable to pay your full mortgage. Be specific regarding the details of your financial hardship. Request that your lender consider a loan modification or a short sale.

In the second paragraph, suggest viable solutions to your financial situation. If you are applying for a loan modification, you may seek lowered interest rates or a balance reduction if the home is worth less than your mortgage balance. If you are applying for a short sale, explain how this would benefit both you and your lender by preventing foreclosure.

Use the third paragraph to explain the steps you've already taken to help your financial situation, such as requesting to refinance your mortgage.

Close the letter by restating that a loan modification or short sale is your best option to avoid foreclosure or bankruptcy. Thank the lender for their time and consideration. Include your contact information.

Sign and date the letter. If there is another borrower on the account, ensure that they also sign and date accordingly.


  • Keep your letter brief and succinct. One page is usually sufficient. Include only relevant details and avoid sentimental language.