If you are applying for a loan modification with your lender, you will have to write a hardship letter as part of the application.
This is where you get the chance to tell your story-what has happened to make your mortgage payment unaffordable and why you deserve a modified payment.
There are a few critical elements that your bank will be looking for-make sure your letter includes these for the best results.
Here is an easy outline to help you organize your thoughts and compose your own hardship letter.

1. First, determine the time frame of when the problems first began.
   Write down the approximate dates of the circumstances and the impact on your finances.
   For example, if your hours at work were cut in April 2009, write that down and then correlate it to your late mortgage payment in June.
   This will show the bank the relationship between your hardship and your struggle to make your payments.
   
2. Second, explain what you have tried to do to fix your situation.
   If you have looked for a second job, taken in a roommate or tried to refinance, let your bank know that you have done everything you can, but a loan modification is your only remaining option.
   If you have been using your savings to supplement your income, explain that you are running out of funds and if you don't get some relief you will be facing a default and could lose your home.
   
3. Third, assure the bank that you are committed to home ownership, are willing to make sacrifices and if granted the modification you will not be delinquent in the future.
   You can gain the readers empathy by including a few personal notes on your community involvement, perhaps your church activities, children's sports or anything else that shows you are a part of your neighborhood community and do not want to have to move.
   

There are actually key phrases that your lender will be looking for-if you include these in your letter it will be easy for the bank to see that you are indeed facing an acceptable hardship.
One of these is "imminent risk of default"-this is of the triggers for the Obama HAMP plan approval.
There are a couple of more terms that you should include, make sure you use them to write and effective hardship letter that gets results.
Remember, you must show your bank that you are facing a change in your finances due to circumstances out of your control and have exhausted all of your options.
Your hardship can be immediate or in the near future.
If you anticipate facing delinquencies, explain that as well.
Your hardship letter for loan modification is your chance to gain your banks cooperation, make sure you write an effective and compelling story.