FORBEARANCE REQUEST LETTER

SENDER INFORMATION

From:
[________________________________] (Borrower Name)
[________________________________] (Address Line 1)
[________________________________] (Address Line 2)
[________________________________] (City, State, ZIP)
Telephone: [________________________________]
Email: [________________________________]
Social Security Number (last 4 digits): XXX-XX-[____]

Date: [__/__/____]

RECIPIENT INFORMATION

To:
[________________________________] (Lender / Loan Servicer Name)
Attn: Loss Mitigation Department
[________________________________] (Address Line 1)
[________________________________] (Address Line 2)
[________________________________] (City, State, ZIP)

RE: FORBEARANCE REQUEST

Loan Number: [________________________________]
Borrower Name(s): [________________________________]
Co-Borrower Name(s) (if applicable): [________________________________]
Property/Collateral Address: [________________________________]
Loan Type: ☐ Conventional ☐ FHA ☐ VA ☐ USDA ☐ SBA ☐ Commercial ☐ Other: [____]
Current Loan Balance (approximate): $[________________________________]
Monthly Payment Amount: $[________________________________]
Current Loan Status: ☐ Current ☐ 30 Days Past Due ☐ 60 Days Past Due ☐ 90+ Days Past Due

PART 1. FORMAL FORBEARANCE REQUEST

Dear Sir or Madam:

I am writing to formally request a forbearance on the above-referenced loan due to a financial hardship that has affected my ability to make my regular loan payments. I am committed to meeting my obligations and am seeking temporary relief while I work to resolve my financial difficulties.

This letter constitutes a loss mitigation application under 12 C.F.R. § 1024.41 (to the extent the loan is a federally related mortgage loan) and/or a request for forbearance under the terms of the loan documents. I respectfully request that you consider this request in good faith and in accordance with all applicable federal and state laws.

1.1 Type of Forbearance Requested

☐ Full Forbearance — Suspension of all payments during the forbearance period
☐ Partial Forbearance — Reduced monthly payment of $[________________________________] during the forbearance period
☐ Principal-Only Deferral — Continue paying interest and escrow; defer principal payments
☐ Interest-Only Payments — Payment of $[________________________________] per month (interest only)
☐ Other Arrangement: [________________________________]

1.2 Requested Forbearance Period

Requested Start Date: [__/__/____]
Requested End Date: [__/__/____]
Total Requested Duration: [____] months

1.3 Proposed Repayment of Forbearance Amount

Upon expiration of the forbearance period, I propose the following method to address the deferred amounts:

☐ Lump Sum Payment — Pay all deferred amounts in a single payment at the end of the forbearance period
☐ Repayment Plan — Increase monthly payments by $[________________________________] over [____] months following the forbearance period
☐ Loan Modification — Request a formal loan modification to capitalize deferred amounts into the loan balance
☐ Deferral to Maturity — Defer the forborne amounts to the end of the loan term as a balloon payment
☐ Extension of Loan Term — Extend the maturity date by [____] months to allow for repayment of deferred amounts
☐ Other: [________________________________]

PART 2. DESCRIPTION OF FINANCIAL HARDSHIP

2.1 Type of Hardship

Please check all that apply:

☐ Loss of employment / job termination (Date: [__/__/____])
☐ Reduction in income / reduction in work hours (Reduction amount: $[____]/month)
☐ Serious illness or medical emergency
☐ Disability (temporary or permanent)
☐ Death of a co-borrower or household income contributor
☐ Divorce or separation
☐ Natural disaster (specify: [________________________________])
☐ Military deployment or PCS orders
☐ Business failure or significant business downturn
☐ Unexpected major expenses (specify: [________________________________])
☐ Increase in housing costs (property taxes, insurance, HOA)
☐ Incarceration
☐ Other: [________________________________]

2.2 Narrative Description of Hardship

(Provide a detailed explanation of the hardship, including when it began, how it has affected your finances, and what steps you are taking to address it.)

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

2.3 Expected Recovery

Anticipated Date of Financial Recovery: [__/__/____]

Basis for Recovery Expectation:

[________________________________]
[________________________________]

PART 3. CURRENT FINANCIAL INFORMATION

3.1 Monthly Household Income

3.2 Monthly Household Expenses

3.3 Assets

PART 4. SUPPORTING DOCUMENTATION CHECKLIST

Please find attached the following supporting documents:

4.1 Income Verification

☐ Most recent 30 days of pay stubs (all household income earners)
☐ Most recent two (2) years of federal tax returns (with all schedules)
☐ Most recent two (2) years of W-2s and/or 1099s
☐ Year-to-date profit and loss statement (if self-employed)
☐ Social Security / disability award letter
☐ Pension / retirement income documentation
☐ Unemployment compensation documentation
☐ Other income documentation: [________________________________]

4.2 Hardship Documentation

☐ Termination / layoff letter from employer
☐ Medical bills or medical records supporting hardship
☐ Disability determination letter
☐ Death certificate (if applicable)
☐ Divorce decree or separation agreement
☐ Insurance claim documentation (natural disaster)
☐ Military orders (deployment / PCS)
☐ Business financial statements showing downturn
☐ Other hardship documentation: [________________________________]

4.3 Financial Statements

☐ Current bank statements (all accounts, last 2-3 months)
☐ Current investment / retirement account statements
☐ List of monthly expenses / household budget
☐ Credit report (optional — servicer will typically pull this)

4.4 Property Information (if secured by real property)

☐ Current property value estimate or recent appraisal
☐ Homeowner's insurance declaration page
☐ Property tax bill
☐ HOA statement (if applicable)

PART 5. FEDERAL FORBEARANCE RIGHTS AND PROTECTIONS

5.1 CARES Act Forbearance — Section 4022 (Pub. L. 116-136)

Note: The CARES Act § 4022 initial forbearance provisions applied to federally backed mortgage loans during the COVID-19 covered period. While the original CARES Act forbearance request window has closed, borrowers should be aware of the following protections that were established:

• Borrowers with federally backed mortgage loans experiencing a financial hardship due to COVID-19 were entitled to forbearance of up to 180 days, with one extension of up to an additional 180 days.
• Attestation of hardship was the sole documentation requirement — no additional proof was required.
• During forbearance, no fees, penalties, or additional interest (beyond what would have accrued under the original contract) could be charged.
• Servicers were prohibited from initiating foreclosure during the forbearance period.

Current Applicability: Even though the original CARES Act forbearance window has closed, borrowers with federally backed mortgages (FHA, VA, USDA, Fannie Mae, Freddie Mac) may still have access to loss mitigation options through agency-specific guidelines and 12 C.F.R. § 1024.41.

5.2 Regulation X Loss Mitigation — 12 C.F.R. § 1024.41

Under RESPA's loss mitigation procedures:

• Complete Application: If the servicer receives a complete loss mitigation application more than 37 days before a foreclosure sale, the servicer must evaluate the borrower for all available loss mitigation options (12 C.F.R. § 1024.41(c)).
• Acknowledgment: The servicer must acknowledge receipt within 5 business days (12 C.F.R. § 1024.41(b)(2)(i)(B)).
• Evaluation: The servicer must evaluate the borrower within 30 days of receiving a complete application (12 C.F.R. § 1024.41(c)(1)).
• Dual Tracking Prohibition: The servicer may not simultaneously pursue foreclosure while a complete loss mitigation application is pending review (12 C.F.R. § 1024.41(g)).
• Appeal Rights: Borrowers have 14 days to appeal a denial of a loan modification option (12 C.F.R. § 1024.41(h)).
• No Foreclosure Referral: A servicer shall not make the first notice or filing required for foreclosure until the borrower's mortgage loan is more than 120 days delinquent (12 C.F.R. § 1024.41(f)).

5.3 Servicer Early Intervention — 12 C.F.R. § 1024.39

• Servicers must attempt to make live contact with delinquent borrowers no later than the 36th day of delinquency (12 C.F.R. § 1024.39(a)).
• Servicers must provide written notice of loss mitigation options no later than the 45th day of delinquency (12 C.F.R. § 1024.39(b)).

PART 6. TAX IMPLICATIONS OF FORBEARANCE

6.1 IRS Treatment

Borrowers should be aware of the following tax considerations:

• Forbearance (Payment Deferral): A forbearance that merely defers payments does not typically create taxable income because the debt is not being discharged — it is being deferred. The full amount remains owed.
• Debt Forgiveness / Cancellation: If any portion of the loan is ultimately forgiven or cancelled, the forgiven amount may be treated as cancellation of debt (COD) income under 26 U.S.C. § 61(a)(11) and may require the lender to issue an IRS Form 1099-C.
• Mortgage Forgiveness Debt Relief Act: Under the Mortgage Forgiveness Debt Relief Act (as extended), qualified principal residence indebtedness discharged by a lender may be excluded from gross income (26 U.S.C. § 108(a)(1)(E)), subject to dollar limitations and expiration dates.
• Insolvency Exception: Under 26 U.S.C. § 108(a)(1)(B), a taxpayer may exclude COD income to the extent the taxpayer is insolvent at the time of discharge.
• Accrued Interest: Interest that accrues during the forbearance period and is later capitalized into the principal balance may be deductible when paid, subject to applicable limitations (26 U.S.C. § 163).

6.2 Credit Reporting

Under the Fair Credit Reporting Act (15 U.S.C. § 1681) and CARES Act § 4021:

• If a borrower is granted an accommodation (forbearance, modified payment plan, etc.) and complies with the terms, the creditor must report the account as current (or maintain the existing delinquency status if already delinquent).
• A creditor may not advance the delinquency status of an account during the period of accommodation if the borrower is complying with the forbearance terms.

PART 7. STATE-SPECIFIC FORBEARANCE PROTECTIONS

7.1 California

• Homeowner Bill of Rights (Cal. Civ. Code §§ 2923.4-2924.19): Requires servicers to provide borrowers with a single point of contact for loss mitigation, prohibits dual tracking (pursuing foreclosure while a complete loss mitigation application is pending), and requires servicers to evaluate borrowers for all available loss mitigation options.
• Cal. Civ. Code § 2924.11: A mortgage servicer must not record a notice of default or notice of sale while a complete application for a first lien loan modification is pending.
• Cal. Civ. Code § 2923.7: Requires assignment of a single point of contact for borrowers who request foreclosure prevention alternatives.

7.2 Texas

• Texas Property Code §§ 51.002-51.009: Governs non-judicial foreclosure procedures. Texas requires at least 21 days' notice before a foreclosure sale and at least 20 days' written notice of default before acceleration.
• Tex. Prop. Code § 51.002(d): Requires a written notice of acceleration and a minimum 20-day cure period before proceeding with foreclosure on a residential property.
• Texas has no state-specific forbearance mandate beyond federal requirements, but servicers must comply with the applicable investor guidelines (FHA, VA, Fannie Mae, Freddie Mac).

7.3 Florida

• Fla. Stat. § 702.01 et seq.: Florida requires judicial foreclosure — all foreclosures must go through the court system, providing borrowers additional time and procedural protections.
• Fla. Stat. § 702.036: Requires servicers to certify compliance with loss mitigation requirements in the foreclosure complaint and provide a certification that the servicer has complied with applicable loss mitigation procedures before the court may enter a final judgment of foreclosure.
• Pre-Filing Requirements: Florida courts require servicers to demonstrate that they have explored loss mitigation alternatives before filing foreclosure actions.

7.4 New York

• N.Y. Real Prop. Acts. Law § 1304: Requires servicers to provide at least 90 days' notice before commencing foreclosure on a residential property (the "90-Day Pre-Foreclosure Notice").
• N.Y. Real Prop. Acts. Law § 1306: Requires servicers to file a notice with the New York Department of Financial Services at least 90 days before filing a foreclosure complaint.
• Mandatory Settlement Conferences: Under CPLR § 3408, New York courts hold mandatory settlement conferences in residential foreclosure actions to facilitate loss mitigation negotiations.
• N.Y. Banking Law § 6-l: Prohibits servicers from engaging in dual tracking (simultaneous pursuit of foreclosure and loss mitigation) for residential mortgage loans.

PART 8. COMMERCIAL LOAN FORBEARANCE CONSIDERATIONS

(Complete this section if the loan is a commercial or business loan rather than a residential mortgage.)

8.1 Business Loan Specifics

Business Name: [________________________________]
Business Type: ☐ Sole Proprietorship ☐ Partnership ☐ LLC ☐ Corporation ☐ Other: [____]
Industry: [________________________________]
Number of Employees: [____]
Annual Revenue (most recent fiscal year): $[________________________________]

8.2 SBA Loan Considerations

If the loan is an SBA-guaranteed loan:

☐ SBA 7(a) Loan — Program Number: [________________________________]
☐ SBA 504 Loan — CDC Name: [________________________________]
☐ SBA Express Loan
☐ SBA Disaster Loan — Declaration Number: [________________________________]

SBA Servicing Requirements: SBA lenders have additional obligations under SBA Standard Operating Procedures (SOP 50 57) regarding loan servicing, deferment, and workout procedures. Lenders must document the basis for any servicing action and are encouraged to work with borrowers to avoid liquidation where feasible.

8.3 Impact on Business Operations

[________________________________]
[________________________________]
[________________________________]

PART 9. ADDITIONAL REPRESENTATIONS

By submitting this forbearance request, I represent and certify that:

☐ The information provided in this letter and all supporting documentation is true, complete, and accurate to the best of my knowledge.

☐ I have not conveyed or transferred any interest in the property or collateral securing the loan since the date of the loan origination, except as previously disclosed to the lender.

☐ I will promptly notify the lender of any material change in my financial circumstances, including but not limited to a return to employment, receipt of a settlement, inheritance, or other significant financial event.

☐ I understand that submitting this request does not guarantee approval of a forbearance and that I should continue making payments to the extent I am able until I receive a written response.

☐ I understand that any forbearance granted is temporary and that the full amount of the loan obligation remains due and payable.

☐ I authorize the lender/servicer to obtain a credit report and verify the information provided in this request.

CLOSING

I respectfully request your prompt review of this forbearance request. Under Regulation X (12 C.F.R. § 1024.41), if applicable, you are required to acknowledge receipt of this loss mitigation application within five (5) business days and provide a decision within thirty (30) days.

I am available to discuss this request and provide any additional documentation at your convenience. Please contact me at:

Telephone: [________________________________]
Email: [________________________________]
Best Time to Reach: [________________________________]

Thank you for your consideration.

Sincerely,

______________________________
[________________________________] (Borrower — Print Name)
Date: [__/__/____]

______________________________
[________________________________] (Co-Borrower — Print Name, if applicable)
Date: [__/__/____]

PROOF OF DELIVERY

Method of Delivery:
☐ Certified Mail, Return Receipt Requested — Tracking No.: [________________________________]
☐ Overnight Courier (FedEx/UPS) — Tracking No.: [________________________________]
☐ Fax — Confirmation No.: [________________________________] Date/Time: [________________________________]
☐ Email with Delivery/Read Receipt — Date/Time Sent: [________________________________]
☐ Hand Delivery — Received by: [________________________________] Date: [__/__/____]

Date Sent/Delivered: [__/__/____]

SOURCES AND REFERENCES

• CARES Act § 4022 (Forbearance Provisions): https://www.congress.gov/bill/116th-congress/house-bill/748
• 12 C.F.R. § 1024.41 (Regulation X Loss Mitigation): https://www.law.cornell.edu/cfr/text/12/1024.41
• 12 C.F.R. § 1024.39 (Early Intervention): https://www.law.cornell.edu/cfr/text/12/section-1024.39
• CFPB Forbearance Guide: https://www.consumerfinance.gov/rules-policy/regulations/1024/41/
• CSBS Consumer Relief Guide — CARES Act: https://www.csbs.org/mortgage-relief-coronavirus-update
• 26 U.S.C. § 108 (Cancellation of Debt Income): https://www.law.cornell.edu/uscode/text/26/108
• Cal. Civ. Code §§ 2923.4-2924.19 (CA Homeowner Bill of Rights): https://leginfo.legislature.ca.gov/
• Tex. Prop. Code § 51.002 (TX Foreclosure): https://statutes.capitol.texas.gov/
• Fla. Stat. § 702.01 et seq. (FL Judicial Foreclosure): http://www.leg.state.fl.us/statutes/
• N.Y. Real Prop. Acts. Law §§ 1304-1306 (NY Pre-Foreclosure): https://www.nysenate.gov/legislation/laws/RPA

This Forbearance Request Letter template is provided by ezel.ai for use by licensed attorneys and borrowers. It must be customized to reflect the specific loan terms and applicable law. This document does not constitute legal advice.