How To Write A Short Sale Hardship Letter

By Jay White

June 7, 2015   •   Fact checked by Dumb Little Man

A hardship letter is intended to explain why a homeowner is behind on his or her mortgage payments. If done well, the letter should give the lender a concise, clear picture of the homeowner’s current financial situation and explain the various circumstances that have led to his or her financial struggles. While the letter is a critical part of the short sale process, people often may not spend much time considering their hardship letter, or they may copy a previously written letter from the Internet. While this may seem like a simple option, keep in mind that the loss mitigation representatives read hundreds of these letters, so it is important to be personal and original to maintain their attention.

The hardship letter should include the homeowner’s contact information, including name, address, telephone number, loan number and date at the top of the letter. Following this, the introduction should begin with a sentence that lets the lender know the purpose of the letter such as, “I would like your consideration to be approved for a short sale.”

Next, in the box of the letter, clearly state the exact hardship or hardships that have led to the delinquent mortgage payments. Explain what happened and why it was out of your control. The goal of the letter is to thoroughly explain the hardship and how approving you for a short sale will help you to avoid foreclosure.

To end the hardship letter, let the lender know that you have every intention of living up to the financial obligation that you have to the mortgage, but doing so is not possible and that a short sale may be your only option to avoid a foreclosure. If you are currently working with a housing counselor, make sure you provide the counselor’s name, contact number and agency information to let the lender know you have explored all outlets and avenues in advance.

The hardship letter should not exceed one page in length, and it needs to be concise and include only the facts that are relevant to the case. Avoid appearing longwinded, do not blame the lender or its employees and do not include any facts that would hurt your case. A common mistake that many homeowners make is stating that things will turn around soon. While the idea is that this statement will give the lender hope, the lender may instead believe that the homeowner may have the financial means to repay part of the debt in the near future, and the homeowner may not be approved for loss mitigation.

Jay White

I started Dumb Little Man many years ago so great authors, writers and bloggers could share their life "hacks" and tips for success with everyone. I hope you find something you like!

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