The Short Sale Hardship Letter
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The Hardship Letter is usually part of the short sale package and is written by the seller or their representative. It is used to explain to the lender the reasons for the borrower's need for a short sale. Reasons such as divorce, job loss, medical issues, etc. can and should be included. Usually just a one page letter with the pertinent information will suffice.

A simple letter in the following form should suffice:

Date

Lender Name
Address
Loan Number

Dear Sir/Maam,

{In this section explain your hardship and why you must utilize a short sale - some example hardship reasons are listed below}

• Unemployment
• Reduced Income
• Divorce
• Separation
• Medical Bills
• Too Much Debt
• Death of my Spouse
• Death of a family member
• Payment Increase
• Business Failure
• Job Relocation
• Illness
• Damage to Property
• Military Service
• Incarceration
• Other (Please Specify)

Borrower’s Signature

Date

Co-Borrower’s Signature

Tips on how to write a letter of hardship

In your financial hardship letter you should:

• Keep it brief and to the point.
• Do not be too vague in your explanation, or too technical.
• Write with feeling and emotion. (make them cry when they read your letter).
• Identify the reasons for failing to keep current with your monthly payments and the DATES which coincides with the delinquency period.
• State your offer to resolve your debt.
• Show them you are willing to participate in a Workout Solution or the desire to retain ownership of the house or property.
• Thank them for their time and consideration.
• Don’t forget to leave your current contact information.
• Enclose bank statements from the past two months, late notices on your car, last year's tax returns, and anything else you can find that shows the financial trouble you are going through.

Some GOOD EXAMPLES of hardship to include in your letter are:

• any medical complications that would prevent you from maintaining employment
• drastic decrease in salary
• lost of employment
• fixed income
• single parent w/out child support

BAD EXEMPLES:

• legal issues
• divorce
• you are a student
• you are overextended
• threatening to file bankruptcy

Here's a sample mortgage hardship letter that can be used as a guide. Don’t forget to insert your OWN details inside the PARENTHESIS or where appropriate and DELETE any information that is not relevant to your case. Also, always DATE your letter and keep a COPY of the letter you send for your records.

(Date)

(Lender Name)
(Lender Address)
(Lender's fax number)

RE: Hardship Letter - Short Sale for (your address)

Dear Creditor:

Since last (month) I am experiencing financial difficulties due to (layoff, medical problem).

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 affect 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. If you have any questions, or need anything further from me, you can contact me at (your phone # with area code.)

I am enclosing my (bank statements, late notices on your 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)