Creating a compelling hardship letter requires creativity. Be honest, but convey that you are suffering from hardship, your situation is bleak and you do not see a way out. This letter is very important and should be written with correct grammar, spelling and should convey your message in effectively. Be sure to include copies of all documentation that can/will prove your state of affairs.
- The Seller's Hardship Letter should be at least one page long and should convey that the homeowner is in a dire situation, cannot make his/her payments and why the situation is not likely to change.
- You will also want to include (in detail) the cause of this situation. Obviously the worse the situation, the more likely the short sale will be approved.
- Be sure to attach copies of any phone, electric, cable, water, gas and credit card bills showing a past due status, notice of disconnect or turned over to a collection agency. Make sure to mention if you have been using credit cards to live, eat and pay bills! Copies of delinquent medical or hospital bills, divorce decree and all judgments against the homeowner, layoff notices, accident reports may also help your cause.
- Describe your intentions with regard to the deficiency the short sale will cause. Are you willing/able to pay an unsecured note for the difference between the amount owed and the sales price? If so, you would need to give specifics such as how much you would be willing to pay and in what time frame. If your finances won't allow, then specify that you will be unable to repay the debt.
- Note where you will be living after the property is sold. Will you be renting, living with relatives, living in a 2nd home? Include your new contact information!
Just to give you an idea....The following are reasons that are typically accepted by lenders in consideration for a short sale:
- Job or significant income loss
- Homeowner or immediate family member has experienced an illness that has wreaked havoc on personal finances
- Adjustment in mortgage payment (i.e. arm) resulting in homeowner no longer being able to afford loan payment.
- Unforeseen increase in living expenses
- Divorce (split of domestic partners) or death of spouse has occurred: income has changed and owner has insufficient income to pay loan.
- Transferred/relocated out of area by employer and property cannot be sold nor rented.
- Military duty for extended period
- Suffered disabling injury and is unable to work
- Unemployed and unable to find employment due to economic conditions.
- Has become financially insolvent.