President Barack Obama is giving Mortgage Loan Modification a central role in his Seventy Five Billion foreclosure prevention program.

The Homeowner Affordability and Stability Plan will help homeowners avoid foreclosure by modifying troubled loans to a monthly payment the borrower can afford.


The program offers incentives that will lower payments by offering:

  • Reductions of loan interest rates.
  • Reductions of loan principal (at your lender’s discretion).
  • Loan extensions (from 30 to 40 years)

The program does allow lenders to reduce principal, but makes interest rate adjustments the primary method for borrowers to achieve affordable payments.

If you have two mortgage loans, only the first mortgage is eligible for a modification.

Mortgage lenders are now accepting applications for the new plan.

Although The Homeowner Affordability and Stability Plan program is limited to loans held or securitized by Fannie Mae or Freddie Mac, you can still use this sample letter asking for a modification of your loan or to apply for a mortgage refinancing even if your loan is backed by other financial institutions.

Most lenders are willing to work with you in finding a solution that will allow you to keep your house.

Below you'll find a free loan or mortgage modification letter sample you can use to send to your financial institution and hopefully get the mortgage adjustment or loan modification agreement that will help you keep your family home. Just select, copy and paste it to your word processor. Make the adjustments as necessary.


Loans are evaluated for modification on a case-by-case basis. The criteria for eligibility will include:

  • You must live in the property as your primary residence.
  • Your monthly mortgage payment is greater than 31% of your monthly gross income;
  • Your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits.
  • Must be able to demonstrate a financial hardship
  • Prove that you are either delinquent now or will become delinquent in the near future.

Your mortgage lender will determine final eligibility based on your current financial situation. Call your lender for more information on eligibility.

Roughly 1 in 6 homeowners are "underwater," (meaning they owe more on their mortgage than the house is worth.)

You don't need to be behind on your mortgage to get a loan modification.

If you are struggling to stay current and are at risk of default due to a significant increase in expenses, loss of income, or an interest rate that will reset to an unaffordable level, you can also take advantage of the program.

Things to watch out for...

There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan.

Be aware of organizations attempting to charge a fee for housing counseling or modification of a delinquent loan, especially if a fee in advance is required.

Unfortunately, many borrowers are drowning in other types of debt beyond the mortgage, like credit card debt and unexpected medical expenses, what makes just adjusting their first mortgage or lien, is not going to be enough.


Pacific States: Alaska, California, Hawaii, Oregon, Washington
South Central States: Arkansas, Lousiana, Oklahoma, Texas
Southwest Desert States: Arizona, Nevada, New Mexico
South Central States: Arkansas, Lousiana, Oklahoma, Texas
Plains States: Iowa, Kansas, Missouri, Nebraska, North Dakota, South Dakota
Mountain States: Colorado, Idaho, Montana, Utah, Wyoming
Southeast and Gulf States: Alabama, Florida, Georgia, Mississippi, South Carolina
Atlantic Coast and Appalachian States: Kentucky, Maryland, North Carolina, Tennesse, Virginia, West Virginia
Middle Atlantic States: Delaware, New Jersey, New York, Pennsylvania
Great Lakes States: Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin
New England Region: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont

How to write a Hardship Letter

Sample Mortgage Hardship Letter

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DISCLAIMER: The law will vary depending on your state, jurisdiction and the specifics of your case. The information provided by is intended for educational purposes only. The content on this site should NOT be considered professional legal advice or a substitute for professional legal advice. For such services, we recommend getting a free initial consultation by a licensed Attorney in your state.

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