The Basics of Writing a Short Sale Hardship Letter

What in short sale and letter and why do I need to write one? Please mail your real estate agent has explained the process of short sale to you and has told you that you need to write a short sale hardship letter. If you are reading this is most likely because they did not thoroughly explained that to you. The hardship letter is the statement from you to your lender as to why you no longer can make your mortgage payment and why they should accept a short sale on your home.

What shouldn’t you do when writing a hardship letter? Your short sale hardship letter is not the place to complain about your lender! As you sit down to write your letter resist the urge to complain to your lender about how unfair they are and how bad your loan is. They simply do not care! You need to focus on staying factual and nonemotional as you write your hardship letter. Keep in mind that the person reading your hardship letter does not really care about your situation but has the power to approve or disapprove the sale of your home. Starting off by telling them how stupid they are, and how unfair the bank is been to them is not likely to help you.

The First Steps to Writing Your Hardship Letter. Before you start writing your hardship letter stop and make a list of all the changes to your finances since you bought your home. Have you lost or change job? Do you have new bills such as medical or education expenses, that have come up?

Go through your list and select three or four that have made the greatest impact on you. These will be the items that you list in your letter to the bank. One by one go through and write out exactly how each one has hurt you financially and contributed to your inability to pay your mortgage.

How Long Should My Short Sale Hardship Letter Be? The easy answer to how long should a short sale hardship letter be is no longer than one page. Be concise, hit all of your reasons for needing to do a short sale, but do not get long-winded in your explanations. Consider that the person reading it let already read hundreds before it and does not want to dig through three pages to find a reason why they should grant you a short sale.

Start Your Hardship Letter. At the top of the hardship letter put your bank’s name that you are requesting the short sale from, their address and their phone number and fax number. Skip a line and insert the date of your letter. Skip another line and put the header “Request for short sale – (Your Loan # and Property address).”

You will find that putting your loan number and address on all your paperwork when dealing with the bank will help in keeping them from ‘not getting’ any of your documents. Meaning of course that they got it but promptly lost it somewhere in their office.

Paragraph 1 – Your General Financial Situation

In the first paragraph of your hardship letter state the change took place why you can no longer afford your payments. Keep your explanation brief and simply let them know that some change happened between the time you bought the home and how it has affected your ability to pay your mortgage loan. Ex: “I lost my job and have had a serious reduction in income”

Paragraph 2-Your Local Real Estate Market

In the second paragraph of your letter will explain how your home’s value has gone down. Discussed changes to the local market, the number of homes for sale, how many bank owned in short sale properties are around your home and so on.

Your real estate agent should be able to provide some of this information for you. It is definitely a good idea to as accurately as possible document why their acceptance of short sale is financially beneficial to them.

Paragraphs 3 & 4 – Explain Your Situation in Detail

in your middle paragraphs explain in more detail the changes in your finances that have brought you to your current situation. Insert details such as how much her income has dropped how your bills have increased and so on. Again the whole point of this is to show the person evaluating your file how despite your best efforts you are no longer able to afford your home.

Paragraph 5 – Your Declaration

Very plainly in the last paragraph of your letter declare that despite your desire to keep paying your mortgage and to not sell your home that your current financial situation makes that impossible and that if the bank does not approve a short sale then they will be forced to take back your home via foreclosure. Hopefully you have done a good job in convincing them that it is now worth considerably less than what is owed and that is in their best interest to let your short sale so go through.

I Wish You the Best of Luck With the Sale of Your Home

I hope this explanation of how to write a short sale hardship letter will help you complete the short sale of your home. It is heart-wrenching for me to work with so many homeowners that are in situations like yours where they are being forced to sell homes they intended to live in for many years to come.