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Short Sale Hardship Letter

Are you considering a short sale and have been asked to send your lender a Short Sale Hardship Letter?

Not sure what to include and what they want. Here are some general guidelines:

Include the date, and your loan number, property address, and names at the top.

Attention Short Sale Department

To Whom it may concern:

(Explanation of hardship) What changes have occurred in your life since the origination of your loan? Try to keep your hardship letter on one page.

Examples of acceptable financial hardships are:

  • Loss of income
  • Income reduction
  • Business failure
  • Damage to property
  • Death of spouse or wage earner
  • Death of non-wage earner
  • Severe illness
  • Inheritance
  • Divorce
  • Relocation
  • Military service
  • Payment increase or mortgage adjustment

Your Short Sale Hardship Letter needs to detail your specific story. Remember, the person who reads this is a real person. Explain that you would like to help them avoid having to foreclose on the property in default. Explain if you think your situation will or will not improve in the near future. If you lost your job or if you got your working hours reduced, or if you have a roof leak you can’t afford to fix, etc..

In your Short Sale Hardship letter, detail when your hardship started. If you lost a job, tell them the date you became unemployed and let them know the financial impact this has had on your household. Indicate if you are receiving unemployment benefits and the amount received. If divorce has caused hardship, let them know the date of divorce and the financial hardship the separation has created.

If you can identify more than one hardship on your Short Sale Hardship Letter, do so. It is essential to give them a clear understanding of the issues involved in leading you to a short sale.

If the subject short sale hardship letter is for a rental you own, name the rents received, how long the tenant has occupied the home.

Close the Hardship Letter with:

Sincerely, or Thank you for your consideration, and sign your legal name. Your legal name should be the same as the name on your loan. If you share the loan obligation with someone else, they need to sign as well. All involved parties must be in agreement for a short sale to work.

A Real Estate Agent with experience with short sales will generally try to help you determine which information to include in a hardship letter because they know every correction the short selling bank has to request will delay the short sale process.



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