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In this tutorial, the speaker discusses the importance of the hardship letter when applying for a loan modification, short sale, or deed in lieu. For a loan modification, the letter should convey that, despite experiencing financial hardship, the applicant has since recovered and is now in a stable financial position. In contrast, when seeking a short sale or deed in lieu, the letter should emphasize ongoing financial difficulties and the unaffordability of mortgage payments. The speaker highlights the need to understand the purpose of the hardship letter to effectively communicate the applicant's situation to the lender before preparing the letter.