Hardship Letter Template - Short Sale


The Hardship Letter
The central document in the Short Sale package that will be submitted to the
mortgage lenders that will be taking a loss is the Hardship Letter. The
Hardship Letter provides the homeowner with an opportunity to state their
case as to why they can no longer afford to make their mortgage payment.
The Hardship Letter should be an honest, heartfelt statement outlining the
circumstances that have created the problem. It should include these
1. A brief apology for having to ask the lender to take a loss
2. A description of the steps the homeowner has taken (used credit cards, borrowed
from family, borrowed from retirement accounts) to stay current on the mortgage
3. A clear statement that the homeowner has extended all available options to stay
current on the mortgage and that a Short Sale is the only remaining option, other
than foreclosure.
While it is important for the home owner to provide a complete picture of
their hardship, it is also important to avoid a letter that is excessively long.
In order to get a loss mitigator to understand the hardship, the loss mitigator
needs to read the letter and connect with the writer. Limit the letter to a
manageable length.
If possible, attach to the Hardship Letter any documents, receipts or notices
that support the homeowner’s hardship.
Layoff notice
Letter from employer outlining a reduction in pay or a reduction in hours
Cancellation notices for medical insurance or auto insurance due to non payment
Delinquency notices from creditors and/or service and utility providers
Letters from doctors regarding injury or illness
Disability benefits letter
Divorce or separation papers
Receipt for excessive payments for medications or emergency payments
Any documents supporting a family crisis hardship


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