This is a question that is coming up more and more these days. I thought I would let everyone know what a real estate hardship letter is. A real estate hardship letter or a short sale hardship letter is written by a borrower or borrowers who have fallen behind on payments or are negotiating a short sale with a bank. This letter is written to explain why the home owner fell behind and why they need assistance from the bank with a short sale.
So what should a home owner include in a hardship letter?
- The loan number - funny as it might sound including the loan number is valuable as paperwork often gets lost.
- The reason one fell behind - whether that be the loan adjusted, loss of income, loss of employment, or a combination of factors.
- What the home owner did to try and stay current - if you borrowed or accrued other debt to keep current on your mortgage this is important for the bank to know.
- The truth - funny as it sounds make sure you tell the truth when writing the letter as the bank may choose to look into any and all claims that are made.
A hardship letter is required for most real estate short sales to get approved. We have yet to work with any lender who did not require a short sale hardship letter. Make sure the letter is written promptly and faxed in by your real estate professional or you to the appropriate department.
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