What to include in a Short Sale Hardship Letter.
There are a lot of details that need to occur in order for a short sale to be successful. Although the documentation sent to back in a short sale package may vary slightly, one common item in every short sale package is the short sale hardship letter.
Sometime distressed home owners are confused why a the short sale hardship letter is required. Let me try to clear that up.
It's important that the short sale hardship letter is accurate and also details what has changed in the homeowner's condition that has created this hardship. The short sale hardship letter can make or break the possibility of a bank accepting a property as short sale.
Get your ideas down on paper. It can be a random order (sort it out later), but what you want to focus on is answering several questions from the perspective of the lender. Remember that a short sale is not the solution (or even a possibility) for homeowner that simply wants out of their mortgage because the value of their home has dropped below the amount they originally invested. There has to be some sort of hardship, a change in living situations, that explains why the homeowner is no linger able to make payments.
Write down every thought that comes to mind. If you're stuck, here are some questions to help you move forward:
- Why can you no longer afford the house payments?
- Why are you having financial difficulties?
- Has there been a loss of a job?
- Have taxes increased on the property?
- Has an adjustable mortgage payment become unmanageable due to an increase in interest rates?
- Is there a divorce going on?
- Has credit card debt made finances unmanageable?
- Has there been a medical situation?
- Was the mortgage not explained properly or correctly by the mortgage loan officer?
- Is there a chance the hardship may change in the near future?
Now that you have some ideas, order them in a logical manner, a time-line of what occurred to create the hardship. Make the letter a formal business letter. Open the letter by detailing what has changed from the time you were originally approved for the mortgage until now, when the homeowner is no longer able to make the mortgage payments.
Close the letter by clearly reiterating why you can no longer pay the mortgage. If you do not see any other options, state that. Let them know what your intentions are – do you want to keep the home or not?
Make sure that your contact information is on the letter, as well as the letter being dated. Sign the letter and return to your real state short sale agent to be included in the short sale package.
If you have any questions or concerns regarding short sales in Colorado, please feel free to contact me or I invite you to find more information at our web site: www.ColoradoShortSaleAid.com.