Hardship Letters for Short Sales

Hardship Letters for Short Sales

Hardship Letters for Short Sales

Many homeowners who are behind on payments, owe more than their house is worth, and wish to avoid foreclosure are turning to an alternative way of selling their distressed property: short sales. When asking the bank for a short sale, the real estate professional needs to prove 2 main things to the bank: the property is in distress and the homeowner is in distress. Part of proving that homeowners are in distress require homeowners writing hardship letters to explain why they are unable to pay their bills.

Advice: if you are a real estate professional and require your clients to write hardship letters, give them some guidelines on how to write it. Don't let them figure it out on their own, or you'll have a stack of papers as complicated and large as a congressional bill. You don't tell them what to write, but you can instruct them on what hardship letters are and how to write them.

Simply put, hardship letters are short letters that explains what has happened to the borrower or what has changed since the borrower purchased the property, and why they are no longer able to afford the property.

Hardship Letters | 4 questions to answer

What is the hardship? Examples of hardship would be job loss, decrease in hours, divorce, medical bills, death, etc...

What has changed about the situation from when the property was purchased or the mortgage was obtained? The hardship should show that something significant has happened to the homeowner since they signed the mortgage documents and that this is the reason that the mortgage can no longer be paid.

Has the borrower explored all other alternatives such as loan modification or financial counseling or any other options for avoiding foreclosure?

The real estate professional is the best option left to work with me.

Good hardship letters are short, sweet, to the point, and explain the situation such a way that the even a bank employee can understand and empathize.

If you liked 'Hardship Letters for Short Sales' then you may also enjoy other articles written by Phill Grove, the REI Maverick, at www.REIMaverick.com.

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