Short sale experts will slightly different recommendations about what to put in your short sale hardship letter, but the basic elements remain the same. There are some elements that are very important that don’t think that there are any magic phrases that are going to get you approved or to the head of the line. A hardship letter is only one of a number of items that the bank’s short sale negotiator wants to see in order to work on your file.
The basic purpose of a short sale hardship letter is simply to justify to the bank why they should grant you a short payoff on your mortgage. Therefore, the most important point is to show them that you have a genuine financial hardship that makes it impossible for you to pay the mortgage.
Remember, that you will have to prove your financial hardship by providing bank statements, pay stubs and tax returns so be honest. Provide documentation, if possible, of other factors that have caused hardship such as a medical report.
Some people argue that you should make your hardship letter heart wrenching in order to evoke sympathy from the negotiator. This sounds like great advice but I wouldn’t count on it. A negotiator has hundreds of files and may be hardened to your needs. A negotiator has a checklist of a bunch of criteria that they want before they will process your file for a short sale. Nevertheless, your hardship letter should be thorough in explaining your circumstances. If you do handwrite it, make sure it is legible!
Should your hardship letter should be handwritten? Again, this is another recommendation by some short sale ‘gurus’. Does it really matter? If you were a bank negotiator, would you really think that a typed letter was not real or think that someone who handwrote their letter was more deserving of a short sale?
Should your hardship letter threaten the lender that you file for bankruptcy if you are denied a short sale? Again, as far as the negotiator is concerned, they just want to make sure that you meet all the criteria on your checklist. Maybe if your hardship letter is weak and you sound desperate it may tip the balance. Who knows?
Some people like to include a statement such as, “Please work with my buyer as they have offered me more than anyone else.” Again, it is going to come down to what the bank thinks the property is worth, but it can’t hurt.
So, in summary, your hardship letter must include a request for a short payoff because of a financial hardship and the reasons in detail. You must also include your name, signature, property address, loan number and the date.
For news on short sales, see www.ForeclosureHelpinHollywood.com
You can also go to http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure
BIO
Shirley Wise is an experienced short sale negotiator and has an enviable track record in getting short sales approved by lenders.
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