If you are having trouble making your mortgage, you may want to check out a sample hardship letter for short sale or two, so you can effectively avoid foreclosure and save your home. Many banks are now looking at this with more sympathy these days. This is most likely not because the banks and lenders feel bad for people, but more likely, that a short sale still ensures they recoup some of their money from the borrower, and quicker. Since the foreclosure process can take a year or longer to complete, the lost income banks realize is often greater than the loss incurred by selling a home below the mortgage loan value. This is why these types of hardship letter have become so effective. In this article, I will provide you with specific samples you can use when you write to your lender. All forms are printable, so if you find the example that fits you, just print it off for a reference resource as you write.
NOTE: In this article, I will only provide the nuts and bolts for each example. You will need to add your contact information, the name and contact info of the lender, and sign the forms.
Example 1 – To Avoid Foreclosure
I am writing you in hopes that we can come to an agreement on home mortgage. Specifically, I am requesting your authorization for a short sale.
As you will note on my account, I have missed my last five mortgage payments. I do not take this lightly. I lost my job over a year ago. I was able to keep up with my mortgage for the first 8 months of my unemployment. After that, I could no longer afford to make the payments you are owed.
I have already taken the liberty of speaking to a realtor about the sale of my home. Unfortunately, with the housing market as it is now, in shambles, the realtor feels a reasonable asking and selling price is $110,000. As you will notice on my account, I owe about $118,000 on my mortgage. I have no savings, so coming up with the balance is not possible.
I am very willing to work with you on this matter. I am writing this financial hardship letter to you in hopes of avoiding foreclosure. I feel a short sale is the only real option that can work for both parties.
I would like to meet with a representative from your bank. I can make myself available at a time that is convenient for you.
Thank you for your time and consideration in this matter.
In this sample hardship letter asking for a short sale, you have successfully explained why you have fallen behind and offered an alternative to foreclosure. This could provide benefit to the bank or lender as well, since they are not receiving payments from you.
Example 2 – Buying New Home
I am writing to you regarding my home mortgage loan I took out with your bank in October, 2002. As you will note on my account, I have never missed a payment or made one late. Unfortunately, I am experiencing financial hardship at this time and must request permission to move forward with a short sale.
I decided to go back to school last year, so I could provide for my family. As a single parent and my family’s sole source of income, I felt the need to get a degree, so I could make more money and provide for them. I am struggling to make ends meet and do not want to give up going to school this year.
I have always worked my fulltime job and a part time job on the side. When I decided to go to school, I had to quit my part time job to devote time to studying. I am not able to make ends meet.
I would like to request a short sale, so I can get into a cheaper home. According to the realtor, I can reasonably expect to get $155,000 for my home. Unfortunately, I currently owe $170,000 on the loan. I hope to buy a house in the $85,000 range and would like to roll the amount of the difference into a new loan. This will reduce my monthly payments enough to get by.
Please, feel free to run a credit check on me. You will find that my credit is very good. In fact, last I check, my score was 762. I feel I am a good credit risk for this proposal.
I look forward to meeting with you to discuss this possibility in more detail.
In this example, the writer has good credit, which could be an effective way to get the bank to agree to the offer. If you fall into this category, this type of arrangement might work. If you have a bad score, don’t expect this sample hardship letter for short sale to be nearly as effective.
Example 3 – Promise to Pay Later
I am writing you this financial hardship letter in hopes that you will at least consider a short sale of my home. I have fallen on hard times and feel I have no other options or alternatives at this time.
When I retired, my pension was supposed to carry me through life as long as I worked a few hours here and there. Now, I find myself disabled from an accident. I cannot work at all. To make matters worse, my health insurance isn’t covering all of my bills from the hospital.
I have been able to make all my payments to all creditors through this, but never have anything at all left over. I cannot live like this any longer.
As you will see on my account, my current mortgage payment is $1,434 per month. I owe about $287,000 on the home, but it is currently only valued at $269,000. If I am able to sell the home for this amount, I would be $18,000 below the mortgage amount. I would be willing to pay this amount off in a new loan.
Since I can rent low income housing for about $550 per month, I would have enough money left each month to make the new loan payment, with a little room to spare.
I ask that you please consider this. I don’t believe I have any other options to consider at this time.
In this example, the author has clearly stated what happened and provided the bank with an option for a new loan, so they don’t lose out on any of their money. This could be a very effective sample hardship letter for short sale.