Acceptable Types of Hardship in the eyes of a bank when it comes to a short sale:

Real Estate Agent with

Acceptable Types of Hardship in the eyes of a bank when it comes to a short sale:

Seeing as one of biggest determining factors when applying for a short sale is a viable hardship, I have taken the time to go over what is commonly accepted by every bank when it comes to hardship. Regardless of hardship remember whatever your hardship is, you have to be able to prove it to the bank.


There is  plenty of misconception it seems when it comes to someone understanding what a bank qualifies as an acceptable hardship for a short sale. Although there are exceptions to the rule, for the most part, banks take the approach of verifying that you have a hardship that prevents you from paying your mortgage, and that the hardship occurred after you took the loan out. Remember banks verify this through your short sale package, so they will look at all of your finance’s to determine eligibility. Basic principle is that you have more expenses going out then income coming in on a monthly basis. As mentioned before, there are exceptions but below are the 16 most common hardships that would qualify a seller for a short sale:

1. Loss of Employment
2. Business Failure
3. Damage to Property
4. Death of Spouse or Wage Earner
5. Death of Non‐wage Earner( child care comes in play here)
6. Severe Illness
7. Inheritance(inherited an property with negative equity and can't afford to pay the exspense for it)
8. Relocation
9. Divorce
10. Military Service
11. Payment Increase or Mortgage Adjustment
12. Insurance or Tax Increase
13. Legal Separation
14. Too Much Debt
15. Incarceration
16. Combination of Above

For more information on this sujbect please check our my website at or my blog at

Posted by

Comments (1)

Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

nice list .... and good point about having to prove it ... although I had  few transactions where proof was never asked for past the hardship letter .... 

Mar 05, 2012 10:38 AM