What is Considered a Hardship?

Real Estate Broker/Owner with Richard Bell - Windermere Peninsula Properties

I have been an absentee AR contributor for the past month. My excuses are pretty good though, for example, our local market is picking up somewhat (more pending files to review, working with agents on transactions and solving problems), several new experienced agents have joined our Company (more managing activities) and I have the task of putting together a Homeowners Workshop which I will be hosting in a few weeks (a lot of detail work).

The FREE Workshop's goal is to provide Straight Answers for Homeowners. There will a panel of three professionals: an attorney, an accountant and mortgage representative. I will be the moderator. Subjects will include: What is a Short Sale?, What is Pre-foreclosure, What is loan modification? and so on.

Which brings me to the topic of discussion for this post.

Most of us are aware that Lenders are asking for hardship letters when considering a Loan Modification or Short Sale. Below is a list of "Hardships" I believe the banks will consider when making a decision on a clients loan.

Hardship letters should be kept  short, simple and to the point. They are not asking for the letter as a reason to feel sorry for you. They simply want to know what lead to your current situation.

The banks are currently being inundated with letters and phone calls. I think the best way to get their attention is to be thorough when filling out the paperwork and include a "Straightforward" Hardship Letter; stick to the facts and cooperate anywhere you can. A call once every day or two is helpful. Never assume that they have everything...Double Check!

Here is an sample list of hardships that lenders may consider during the loan workout process:

  • Adjustable Rate Mortgage Reset- Payment Coca(uncommon, but we will see more lenders accept this in the future) 
  • Illness
  • Loss of Job
  • Reduced Income
  • Failed Business
  • Job Relocation
  • Death of Spouse or C0-Borrower
  • Death
  • Incarceration
  • Divorce
  • Marital Separation
  • Military Duty
  • Reduced Income
  • Medical Bills
  • Damage to Property (natural disaster or unnatural)

So my AR friends, do you have anything to add, comment or suggest.



Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Dinah Lee Griffey 04/10/2009 08:32 AM
ActiveRain Community
Running a Brokerage
Short Sale Specialists & Pre-Foreclosure Education
Short Sale REALTORS®
Mason County Realtors and Friends
short sales
hardship letter
sample list of hardships

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Josh Murphy
Windermere Peninsula Properties - Belfair, WA
Belfair WA Real Estate, 360-710-3972

Looks great Richard! I am excited to see the turnout for our workshop, and to see how many people out there we can really reach out to and help.

Apr 10, 2009 06:30 AM #1
Dinah Lee Griffey
Windermere Peninsula Properties - Allyn, WA
Managing Broker Windermere Peninsula Properties

I am looking forward to the workshop. I think we will have a great turn out. It will be refreshing to get strait answers from the source-Dinah Lee

Apr 10, 2009 08:29 AM #2
Irene Kennedy Realtor® in Northwestern NJ
Weichert - Lopatcong, NJ

Good luck on your workshop. I did my first one over a year ago and had the same panel composition.  From that initial workshop, I listed every participant's home as a short sale. Sad news was that it was in January and we had heavy snow. Still, my ratio was 100% of attendee to listings!

I think you have most of the hardships nailed. Just remember that some of those health-type issues could be related to one's children or parents. "We just put mom in an assisted-living facility" or "I just gave birth to 8 babies to round out my family."

I highly recommend that you hand out a list of the documentation folks need to provide when seeking a short sale. I make them bring those items to our first one-on-one appointment after the workshop. Helps determine who are motivated and who might really qualify for a short sale.

I'm wishing you a 100% ratio!


Apr 10, 2009 10:57 AM #3
O. Kheir
Broker Associate, SFR ®, CDPE ®, REOS ®, CREN ®, AHWD ®, RSP - Daytona Beach Shores, FL
Broker Associate, Top Sales

I applaud your initiative to sponsor a class on Short Sales. Your list of qualifying circumstances is right on the money. As a CDPE, my goal is to save homes from foreclosure, and/or to assist them in the sale of their house.

O. Kheir, CDPE, Broker Associate

Apr 12, 2009 02:52 PM #4
Richard R. Bell
Richard Bell - Windermere Peninsula Properties - Belfair, WA
Broker-Manager, Allyn - Belfair Washington State Realtor

Irene, Thanks for the tip on the handouts. Great idea.

O. kheir, I like your goals...saving homes from foreclosure.

Dinah and Josh, Thanks for comments and support. Hope we can help and educate our citizens.


Apr 13, 2009 04:21 AM #5
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Richard R. Bell

Broker-Manager, Allyn - Belfair Washington State Realtor
Ask me a question
Spam prevention

Additional Information