How To Right A Short Sale Hardship Letter
Along with many other documents a bank requires a hardship letter from the home owner when negotiating a settlement for a short sale.
Below are four examples of a hardship letter as well as some notes on writing your own.
Example Hardship Letter 1
(Date)
(Bank or lender’s name)
(Bank or lender’s address)
Loan # (write loan number)
RE: Hardship Letter – Short Sale for (property address)
Dear Sir/Madam,
We/I appreciate this opportunity to explain the circumstances which have caused us to fall behind on our mortgage payments.
Since last (month) I have been experiencing financial difficulties due to (layoff, medical problem, huge increase in mortgage payments etc.).
We/I have done everything possible to improve our financial situation but after having my current financial situation carefully analyzed, I have concluded that it is no longer possible to comply with the original terms of the agreement. I have no choice but ask you for your help on avoiding the foreclosure of my family’s home.
Due to the dropping of home prices that have affected the entire country in the last year, I currently owe more on my mortgage than my home is actually worth.
Please consider allowing me into your Short Sale Program so that we can lower the price and sell the house quickly before it goes into foreclosure. This will allow me to settle my financial obligation to you and have a chance to get back on my feet, without having to file for bankruptcy.
Please understand that financial hardships can occur and many times it‘s not a choice. I deeply appreciate your help in this matter.
I am enclosing my – bank statements, late notices on the car, last year’s tax returns, last 6 months of Profit and Loss statement (if self-employed), last 2 pay stubs for all working borrowers, including L&I and unemployment benefit, authorization to disclose personal information (and anything else you can find that will show full proof of the hardship).
I, (your name), state that the information provided above is true and correct to the best of my knowledge.
Sincerely,
(Home Owner Name)
(Address)
(Account number)
Example Hardship Letter 2
(Date)
(Lender Name)
(Lender Address)
RE: Hardship Letter – Short Sale for (property address)
Dear Creditor:
I used to work at (name of the company), a downturn in the market caused my company to reduce its workforce and consequently I was laid off. I struggled for several months to make my mortgage payment, and was also hit with (medical expenses that I did not expect, death in the family, car needed to work broke down, home repair).
Before I was able to find another job, I tried to borrow the money from friends and family, but had no success. I am now temporarily (unemployed, with a new job paying less) and my financial situation right now cannot sustain a home mortgage of ($) per month.
I want to sell the home, avoid foreclosure and salvage my credit. I would ask that you please assist me in avoiding the foreclosure. It will affect my record for years to come. My attorney has advised me to file bankruptcy, but I prefer to avoid further destruction of my credit. I just want to move on and start over.
I have attached all the documents related to my financial situation including (bank statements, financial statement, pay stubs, loss of job papers etc.) If you have any questions, or need anything further from me, you can contact me at (your phone # with area code).
I deeply appreciate your help and understanding in this matter.
Yours respectfully,
(Your Name)
(Address)
(Loan number)
Example Hardship Letter 3
(Date)
(Bank or lender’s name)
(Bank or lender’s address)
Loan # (write loan number
Dear Lender,
We are contacting you today to request short sale approval for our property located at (your address). Unfortunately, we have fallen on hard times and are no longer able to meet our mortgage obligation.
We purchased our home in (date). At the time, I was employed as a construction supervisor and my wife operated a licensed daycare center from our home. In (date), I was involved in a car accident and had to undergo multiple surgeries. I was unable to return to work on a full-time basis for over a year.
In (date), my wife was diagnosed with breast cancer. Due to her treatments and hospitalization, she had to close the daycare. This caused us to lose over $2500 in income each month.
In (date), the company I worked for went out of business. Not only did we lose my income, we also lost our health insurance. We were unable to find an insurance provider who would pay for my wife’s treatments because they were considered pre-existing.
Although we were able to obtain some financial assistance through the hospital, we had depleted our savings account by June 2008. My wife has recently been able to reopen the daycare, but at this time she is only able to care for three children. Currently, she brings in $900 per month.
My unemployment benefits run out in June of this year. I have yet to find fulltime employment, but work odd jobs when I am able to find them. Our combined monthly income is around $1700. Considering our house payment is $1450 per month, I believe you can see why we are unable to cure our mortgage arrears and become current.
We sold my wife’s car and my motorcycle so we could continue paying for medical treatments. We have enrolled in budget billing through our utility company and eliminated extra features on our phone and cable. We shop at discount grocery stores and utilize coupons whenever possible. We do not go out for dinner, go to movies, or engage in frivolous spending habits. However, we simply do not earn enough to make ends meet.
Obtaining short sale approval would eliminate a tremendous amount of stress and allow my wife to focus on improving her health. We greatly appreciate the opportunity to participate in a short sale and thank you for taking time to review our situation.
Sincerely,
(Your Name)
(Address)
(Loan number)
Notes on Writing a Hardship Letter
State the legitimate, special circumstances you have for falling behind on your house payments.
Explain your current situation and what you are doing to try and get back on your feet.
Don’t make your situation worse by complaining to them. Be honest and represent the facts clearly.
Keep in mind that Banks and Mortgage Lenders prefer to receive a genuine, personal letter from you, rather than a sample but it needs to be short and to the point.
Do not use the terms of your loan as the reason you can’t pay. After all you did agree to this!
