Writing the Short Sale Hardship Letter

Distressed homeowners looking to avoid foreclosure by submitting a short sale proposal to their lender needs to understand the importance of writing a good hardship letter. You have to put yourself in the bank’s shoes and determine if you are worth the risk.

In addition to being honest and straightforward, the hardship letter should also be detailed and compelling. This is certainly not the time to feel ashamed of your true financial situation. Of course, you should not make your story a literary piece, just make sure you provide the three basics: the why, how, and what.

The Why
In your hardship letter, you must be able to make clear the reason you can no longer afford your home. Among the top reasons which could put you in such deep financial mess include a death in the immediate family, serious illness, job transfer or loss and divorce.

The What
To support your reason for the mortgage default, you should be able to provide details such as when the problem started. You need to provide your lender all the facts and make sure the chain of events is stated clearly.

The How
Of course, the bank should also see how you tried to solve your financial problem and avoid defaulting. You could include in your hardship letter the sale of your belongings, borrowing of money from friends and family, taking up a second job or even applying for a loan modification. If your lender finds out you did all you can do to avoid your current situation, they would likely have an easier time approving your short sale proposal.

Lastly, you must be able to prove to your lender your financial difficulties are here to stay. Provide documents of your current income, list of liabilities and assets and other pertinent document to show that even in the future, you will not be able to pay your mortgage. If you give the lender just one small hint you can actually pay your mortgage, your home could be foreclosed quicker. Hire a short sale Realtor for it will make all things a lot easier.