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"Hardship" Is In The Eyes of ....?

Real Estate Agent with 8z Real Estate CalBRE# 01830950

If you're on top of things in the real estate industry, I'm sure you've heard by now that many are anticipating 2010 to be the year of the short sale.  There's also a lot of talk about "strategic" defaults, short sales and foreclosures, where home owners might still be able to afford the mortgage payments but are making a business decision to walk away from real estate because it doesn't make financial sense to keep paying the mortgage as is, especially if they are dipping into savings accounts to do so.

I'm curious, though, how this works in terms of short sales b/c almost every lender requires a hardship letter, outlining the reasons why a short sale has become necessary.  Clearly, issues like losing a job or serious illness would be considered a bonafide hardship by most lenders.  But I heard from one of my colleagues that in one case, the fact that the real estate market has gone down was enough to warrant a hardship, even though the seller in question didn't lose their job or have any other major changes in their financial situation.

Please share your thoughts and experiences on this.  Does this just vary depending on the lender(s) involved?  Thanks in advance for your insights.