Loan Mod Hardship Letter

I am writing this letter to explain my unfortunate set of circumstances that may cause us to become delinquent on our mortgage. We have done everything in our power to make ends meet but unfortunately we are falling short and would like you to consider working with us to modify our loan. Our number one goal is to keep our home and we would really appreciate the opportunity to do that.

The main reason that caused us to request a modification is a dramatic reduction in our combined income. The reduction in our income is due to two events:

Subsequent to losing my job in January’09, I am earning 23% less annually since March’09 after starting in a new consulting job

My wife who is a co-borrower on this loan lost her job in March’09. Since then we have been living on single (my) earnings.

I was working for XXX for over 4 years when it was seized and sold to XXX in September’08. Subsequently over 3000 employees were laid off in January ’09. I was one among them. I started looking for a job and in March’09 found a job as a consultant with XXX Ltd with an annual salary of XXX USD. This pay is a 23% decrease from what I was getting in my previous job. Then to make things worse, my wife who is a co-borrower on this loan lost her job in the same month (March’09). Combined with my reduced income our overall income has dropped by approximately 58%. Owing to the changes in our employment conditions, we have been paying an increased cost to our health insurance. Currently our monthly expenses including mortgage and escrow payments are far exceeding my monthly income (by approximately 1200 USD).

To make timely mortgage payment and meet all other expenses we have been using our savings heavily since April’09. And we have fallen further and further behind on our savings. We have specific planned expenses for the future for which we have reserved our remaining savings. The savings we have left are for the children we are planning to have, emergency expenses, other outstanding debts and my plans to earn a MBA degree. Now, it’s to the point where we cannot afford to pay what is owed to DCU.

As you can see, we have never been late on our payments and have managed all our other debts and expenses very well. It is our full intention to pay what we owe and are very motivated to keeping our home. My wife is actively looking for an employment and we sincerely hope that she will find one soon. But at this time we have exhausted all of our income and resources so we are turning to you for help. We feel that a loan modification now would benefit us both. We would appreciate if you can work with us to lower the mortgage payment to an amount I can meet with my current income.

Keeping our home is our prime objective. DCU helped us realize our dream of owning our home. Now we hope that DCU can help us keep the home and continue living our dream. We truly hope that you will consider working with us and are anxious to get this settled.

Sincerely,

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