Demystifying the Short Sale Hardship Letter Sample

Hey there! Navigating the world of real estate can feel like a puzzle, especially when you're facing financial tough times. If you're exploring the possibility of a short sale, you've probably come across the term "Short Sale Hardship Letter Sample." This letter is a crucial piece of the puzzle, and understanding how to write one can make a big difference in getting your short sale approved.

What Exactly is a Short Sale Hardship Letter Sample?

A Short Sale Hardship Letter is basically a letter you write to your mortgage lender explaining why you can't afford to pay your mortgage anymore and why you need to do a short sale. Think of it as telling your story and showing the bank why this is your best option. This letter is incredibly important because it's your chance to convince your lender that you're not just trying to get out of your debt, but that you genuinely have no other choice. Here's why it matters:

It explains your situation in your own words.
It shows the lender you're being proactive.
It helps them understand your financial struggles.

Without a well-written hardship letter, your short sale request might be overlooked or denied. It's your opportunity to be honest and clear about what's happening. Here's a breakdown of common things to include:

Your contact information
Your mortgage account number
A clear statement of your hardship
A brief explanation of how the hardship started
What steps you've taken to try and fix it
Why a short sale is your best solution

You can also think of the key components like this:

Section	What to Include
Introduction	Your name, property address, and account number.
The Hardship	Explain the specific event (job loss, medical bills, etc.).
Impact	How this event has affected your ability to pay.
Efforts Made	What you've done to try and catch up.
The Ask	Clearly state you are requesting a short sale.
Conclusion	Thank them and provide contact info.

Loss of Employment

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], I am writing to you today with a heavy heart regarding my mortgage payments for the property located at [Your Property Address]. Unfortunately, I have recently experienced a significant financial hardship that makes it impossible for me to continue making my monthly mortgage payments. On [Date of Job Loss], I was unexpectedly laid off from my position as [Your Job Title] at [Your Former Employer]. This was my sole source of income, and my spouse's income, while helpful, is not sufficient to cover all our essential living expenses and our mortgage payment. I have been actively searching for new employment since then, but as of yet, I have not secured a position that can adequately replace my previous salary. Due to this sudden and unforeseen loss of income, I have fallen behind on my mortgage payments. I have explored all options to try and catch up, including [mention any attempts like borrowing from family, cutting expenses, etc.], but these efforts have not been enough to bridge the gap. As a result, I am facing the difficult reality of foreclosure. Therefore, I am respectfully requesting your consideration for a short sale of my property. I believe this is the most responsible and equitable solution for both parties involved, allowing me to avoid the severe financial repercussions of foreclosure while allowing you to recover some of the outstanding loan balance. I am cooperating fully and am eager to work with you to facilitate this process. Thank you for your understanding and consideration of my situation. I look forward to your prompt response. Sincerely, [Your Signature] [Your Typed Name]

Medical Emergency

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Medical Hardship - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], I am writing to you today to explain a severe financial hardship I am currently experiencing, which prevents me from making my mortgage payments for the property at [Your Property Address]. My mortgage account number is [Your Loan Account Number]. In [Month, Year], I or a member of my immediate family, [Name of person affected], experienced a serious medical emergency. This resulted in significant and unexpected medical bills totaling approximately $[Amount]. Despite having [mention insurance if applicable, e.g., health insurance], the out-of-pocket expenses, along with the inability to work full-time during this period, have severely depleted our savings and made it impossible to meet our financial obligations, including our mortgage. We have made every effort to manage these costs, including [mention attempts, e.g., setting up payment plans for medical bills, drastically reducing personal spending]. However, the ongoing nature of medical recovery and the accumulated debt have placed an insurmountable strain on our finances. Given these circumstances, I am requesting a short sale of my property. I believe this is the best course of action to avoid further financial devastation for my family and to mitigate losses for [Lender Name]. I am committed to working cooperatively with you to find a mutually agreeable solution. Thank you for your time and understanding. I await your response. Sincerely, [Your Signature] [Your Typed Name]

Divorce or Separation

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Divorce/Separation - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], This letter is to inform you of a significant personal hardship impacting my ability to make mortgage payments on the property located at [Your Property Address]. My loan account number is [Your Loan Account Number]. My spouse and I have recently decided to separate/divorce. This unforeseen change in our household circumstances has drastically altered our financial situation. [Choose one: As we are dividing assets and liabilities, it has become clear that we can no longer afford the mortgage payments on this property. OR As I will now be solely responsible for the mortgage, my income is insufficient to cover the monthly payments.] This situation was not anticipated and has placed a substantial financial burden on me. We have explored various options to adjust our finances, but the reality is that maintaining this property is no longer financially feasible for me/us. I am committed to resolving this situation responsibly and avoiding foreclosure. Therefore, I am requesting that [Lender Name] consider approving a short sale for the property at [Your Property Address]. I believe this is the most practical and beneficial solution for all parties involved. I am prepared to provide any necessary documentation to support this request and am eager to cooperate fully throughout the process. Thank you for your understanding and assistance. Sincerely, [Your Signature] [Your Typed Name]

Job Relocation / Transfer

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Job Relocation - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], I am writing to you concerning my mortgage for the property at [Your Property Address] (Loan Account Number: [Your Loan Account Number]). I am facing a significant hardship that necessitates this communication. Recently, I was offered and have accepted a new position with my employer, [Your Employer Name], which requires me to relocate to [New City, State] effective [Date of Relocation]. This relocation is mandatory for my career advancement and is a critical step for my professional future. Unfortunately, the sale of my current home at [Your Property Address] is not progressing as quickly as anticipated, and I am unable to afford to maintain two residences or commute back and forth to manage two properties. I have attempted to sell my home through traditional means, but the market conditions have been challenging, and I have not received an offer that covers my mortgage balance. The impending relocation means I cannot continue to afford the mortgage payments on [Your Property Address] while also establishing myself in my new location. Given these circumstances, I am formally requesting approval for a short sale of my property. I believe this is the most viable option to avoid the negative consequences of foreclosure and to allow me to focus on my new role. I am committed to working with you to make this a smooth process. Thank you for your attention to this urgent matter. Sincerely, [Your Signature] [Your Typed Name]

Increased Living Expenses / Inflation

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Increased Living Expenses - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], I am writing to you today to explain a significant financial hardship I am experiencing regarding my mortgage for the property at [Your Property Address] (Loan Account Number: [Your Loan Account Number]). Over the past [Number] months/year, I have seen a substantial increase in my essential living expenses, including [mention specific examples, e.g., groceries, utilities, gas prices, insurance premiums]. This rise in the cost of everyday necessities, coupled with [mention any other minor financial strain, e.g., a slight reduction in work hours, an unexpected car repair], has made it increasingly difficult to manage my budget and meet all my financial obligations. While I have always made my mortgage payments on time, the current economic climate has strained my finances to the breaking point. I have carefully reviewed my budget and cut back on all non-essential spending, but the increased cost of living has outpaced my income, leaving me unable to sustain the current mortgage payments. As a result, I am facing the possibility of falling behind on my mortgage. I believe that a short sale of my property is the most responsible way to address this situation, allowing me to exit my mortgage obligation with less damage to my credit than a foreclosure would cause. I am fully committed to cooperating with you to achieve this outcome. Thank you for your consideration and understanding of my situation. Sincerely, [Your Signature] [Your Typed Name]

Business Failure / Bankruptcy

[Your Name] [Your Address] [Your Phone Number] [Your Email] [Date] [Lender Name] [Lender Address] Subject: Hardship Letter - Request for Short Sale - Business Failure - Property Address: [Your Property Address] - Loan Account Number: [Your Loan Account Number] Dear [Lender Name], This letter is to inform you of a severe financial hardship I am currently facing, which directly impacts my ability to fulfill my mortgage obligations for the property at [Your Property Address]. My loan account number is [Your Loan Account Number]. I am the owner of [Your Business Name], a [Type of Business] business. Unfortunately, due to [mention reasons for failure, e.g., a significant downturn in the industry, unexpected economic challenges, loss of key clients], my business has experienced significant financial losses and is no longer viable. This has resulted in a complete loss of income for me and my household. I have explored all avenues to save my business, including [mention attempts, e.g., seeking investment, restructuring operations], but these efforts have unfortunately been unsuccessful. The failure of my business has left me with no personal income to cover my essential living expenses, let alone my mortgage payment. In light of this devastating financial blow, I am requesting your approval for a short sale of my property at [Your Property Address]. I believe this is the most practical and responsible solution to avoid foreclosure and minimize losses for both myself and [Lender Name]. I am prepared to provide documentation regarding the business failure and am eager to work with you to expedite this process. Thank you for your understanding and prompt attention to this critical matter. Sincerely, [Your Signature] [Your Typed Name]

So, there you have it! A Short Sale Hardship Letter Sample is your personal story of why you can't afford your mortgage anymore. By being honest, clear, and providing all the necessary details, you give your lender the best chance to understand your situation and hopefully approve your short sale. Remember, it's about showing them you're trying your best to find a solution.