How to Write a Letter Requesting a Mortgage Forbearance

Property owners experiencing dire financial problems might be unaware of options available to them. Foreclosure isn't inevitable if you experience a drop in income and risk falling behind on your home loan. Mortgage lenders must foreclosure if you stop paying the debt. But in truth, lenders don't want to foreclose. The entire process of reclaiming a property is costly for lenders, and there is no guarantee that the lender will resell the property. This results in a stockpile of empty properties. Reducing the number of empty properties is a top priority for some lenders, and helping property owners keep their homes and mortgages alleviates this problem. This is why lenders offer mortgage forbearance and other home loan alternatives.

Forbearance doesn't get rid of your mortgage payment, but as a distressed homeowner, you can skip payments for three to six months -- sometimes longer. This gives you a little breathing room as you look for new employment and get your finances on track. But even if you meet the qualifications for forbearance, getting approved requires drafting a very convincing letter. Lenders need to know details regarding your current finances, and lenders only approve forbearance requests if foreclosure is a likely possibility.

Tip #1: Immediately state your reason for submitting the letter. Borrowers send hardship letters for various reasons. Some write a lender to request a short sale, while others might request a deed in lieu of foreclosure. Don't beat around the bush. Tell the lender why you're writing in the first couple of sentences.

Tip #2: Provide the lender with adequate information about your situation. It isn't enough to say that you need a forbearance because you can't afford your home loan. Lenders need more details. For all they know, you squandered your money gambling or have a shopping problem. Yes, losing your job is embarrassing. But requesting a forbearance isn't the time to develop shyness. The more information you disclose about your situation, the better your chances of obtaining help. Notify the lender of your job loss and describe all efforts on your part to secure new employment.

Tips #3: Support your claim. Don't expect your mortgage lender to approve a forbearance based on your word alone. Make copies of your most recent tax returns and other income documentations. Write a list of your monthly bills and attach copies of statements. Disposable income determines approval, and bills must greatly exceed your income in order to qualify for forbearance.

Tip #4: Request help before you miss a mortgage payment. Lenders vary, and while they typically don't negotiate short sales, modifications and deed in lieu's until after a borrower misses a payment, the majority of lenders will only consider a forbearance if the mortgage loan is current or in good standing.

"Unemployment and Forbearance," Bank of America