Realistic Hardships For Short Sales

Why would your lender consider doing a short sale with you? A hardship on your part that will keep you from being able to make the monthly payments.

Most but not all of the time your lender is going to require some kind of hardship in order to complete a short sale. You must become qualified to sell your home short, you will need a hardship you can not quickly or easily fix to get approved.

Part of your application for the short sale will be a hardship letter that details why you are not able any longer to make the required payments on your mortgage any longer to your current lender. The hardship letter will be one of the determining factors on whether a short sale is approved or not.

A hardship is not required to receive approval for a short sale, but it certainly helps. A lack of hardship will almost certainly result in the lender asking the borrower to make a contribution to the closing, or to sign an agreement to repay some or all of the funds they are short at closing. It may even be a combination of the two.

Any of the following will typically qualify as a legitimate hardship for a short sale:

Reduced income from a borrowers extended job loss, disability, illness, or just a reduction in the number of hours that a causes the inability to keep making payments.
Serious Marital Problems - Separations and divorces are honest reasons a lender will think about a short sale.
Expenses that have increased - Reasons could include an increase in dependents, a serious illness, etc.
Debts rising beyond control - charge cards bills (but make sure this wasn't from over spending on bigsreen TV's or designer purses), hospital bills, legal fees and other similar types of money trouble.
Death - Death of a family member who was a contributing factor in keeping the mortgage current. Also the corresponding loss of income or medical bills associated with the death such as funeral expenses, etc.
Relocation for a job - The relocation must be due to a job change and lenders also typically require the move to be over 50+ miles.
Army service - Your lender may consider being activated a hardship. You know it is, so you will need to document why it will be for your family.