Facing foreclosure I am seeking a deed in lieu. What should I include in my hardship letter?

If you need a deed in lieu of foreclosure, your lender will require you to submit a hardship letter. The hardship letter will allow you to explain in details what your current financial situation is, and why you are having hardship with the mortgage or deed of trust payments. 

The hardship letter should be typed in one page only and must be in business format. The letter must contain your identifying information such as your name, address, loan number and contact information. The letter must also include your detailed current financial situation, including the income and expenses. Describe the reasons behind the financial hardship and why it will prevent you meet future loan or mortgage payments. Several reasons that may be accepted by your lender are: job loss or business failure, serious illness and loss of co-borrower either through death or divorce. You may also include other scenarios that caused lost income and other unexpected and unpreventable expenses that made a big impact on your cashflow.

Do not include in you hardship letter the asset value fluctuations. Include however, documents that will support your reasons for financial hardship. These documents could be medical bills, proof of unemployment or payslips, bank records and financial statements, decree of divorce, death certificate, bills - including regular monthly household bills, and other documents that will detail all debts and assets. Also include the efforts made by you to prevent default in loan payment, either by asset liquidations, lowering expenses and exhausting all possible income sources.