The Hardship Letter
Having a well-written hardship letter is second only to a good solid offer from the lender’s point of view on whether a short sale will be approved.
A sellers’ hardship letter should include a list of all of the factors that have caused them to fall behind (or will soon cause them to fall behind) on their mortgage payments. Eligible hardships include a job loss, income reduction, illness, relocation, divorce, medical bills, death of a spouse, etc. The seller should make a note of when each event occurred, listed in chronological order. The note should ring true (and be true), and it should convincingly build a case of hardship.
The letter should be formatted properly, free of grammatical errors, and kept to one to two pages. Lenders receive hundreds, even thousands, of hardship letters, so to be effective the letter must be concise and to the point.
When listing the reasons why they fell behind on their payments, the seller should also detail (and where possible, document) the steps they took to correct the situation. For example, if one or more of the sellers recently became unemployed, they should describe how they tried to find a new job and the results of their efforts.
The very end of the letter should be a request for a short sale, including the fact that the seller is aware of the consequences associated with this event and desperately would like to avoid foreclosure or bankruptcy.
