Example Hardship Letter
A well written Hardship Letter (written by the homeowner in his/her own handwriting) is one of the most important letter’s in your Short Sale Packet. Sometimes bad things happen to good people. It is highly doubtful that the homeowner intended to default on his / her mortgage and end up in foreclosure. Most likely their enjoyment of the American Dream of homeownership was interrupted by some tragic event. Maybe the loss of a job, a bitter divorce, or the unfortunate untimely illness or death of a family member caused the homeowner borrower to default on his mortgage.
Whatever the catalyst, the lender wants to hear from the borrower just what happened to cause them to be in the financial situation they are in.
If the bank is going to consider taking a short sale, they need to be convinced that something drastic has happened to the borrower that will make it impossible for the borrower to recover and that it is in the bank’s best interest to accept a short sale on the defaulted mortgage. The following is an example hardship letter (Of course details change according to each Distressed Homeowner).
DATE: ACCOUNT NUMBER:
BORROWER AGENT CONTACT (LENDER)
PROPERTY ADDRESS_______________________________________________________________________
RE: HARDSHIP LETTER
We have purchased our family’s home in 2002. At this time we had the income to support the mortgage.
Since then, as you know, our country has experienced one the biggest housing market crashes in history. This, combined with the rising food and gas prices and current slowdown in the economy, has affected our ability to pay our bills on time.
Our adjustable interest rate mortgage payment has increased from ($) to ($) since we first purchased the house making it especially hard to keep it current. And in the last couple of years our home has lost about (55%) of its value making it difficult to refinance it since the equity we once had is now gone.
In early 2007 my father was diagnosed with cancer and need substantial medical support which included a nursing home which was all very expensive. He has since passed away in October of the same year and my husband lost his job and has since taken a significant cut in pay. We love our home and neighborhood and do not want to lose it, but we have come to realize that we can’t afford it any longer.
With our combined incomes of only $40,000 annually and by exhausting all of our savings, IRA’s and college funds, we were able to keep up with our mortgage and stay current until June 2008. Since then, we have no longer been able to keep up and tried to get partial payments, payment plans, and to refinance; which were denied on all account. In August of 2008 we put our home up for sale with (Agent Name and Brokerage) who specializes in pre-foreclosure properties and short sales.
At this point we are trying to avoid foreclosure and/or bankruptcy and would like to discuss with you the possibility of getting a (short sale, loan modification, refinance, repayment plan, reinstatement, forbearance, deed in Lieu) that could be beneficial for both parties. I know that a foreclosure would affect me for years to come, I ask that you please assist me in avoiding this.
Enclosed, please find copies of the our financial statements. (include documents that offer proof of financial hardship: Copies of any unpaid bills and/or late notices you have received in the last 6 months. Including: credit cards, car payments,…Past 2 months of Proof of Income. Including: paycheck Stubs, social security,… Last quarter’s profit and loss statement if self-employed, Past 2 years of income tax returns, and last 3 months of bank account statements.)
We truly appreciate any effort you can make to help our family through this situation.
I/we, (Home Owner Name/Co-signer Name), state that the information provided above is true and correct to the best of my/our knowledge.
Sincerely,
Obviously short sales are more difficult than your average buy/sell, but if agents want to maintain or grow a successful business, learning how to work a short sale is vital. It’s not going away anytime soon. We still have another huge hurtle when the adjustable rate mortgages flex their muscle in the coming years. To see a list of 27 documents every Short Sale Packet must have just click on the image below.
Your marketing efforts are the first or last that a consumer knows of you. Make it good and make it memorable. Here’s to your success.
Creating an effective and compelling hardship letter requires creativity. Maggie Guidelines
Hello Maggie, yes it does! And sincerity. Thank you!
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