9 Simple Steps for Writing a Successful Hardship Letter

In the last post I promised to give more details about a part of the short sale process called the hardship letter. This is where you persuade the bank who owns your home to let you sell the property for less than you owe on the mortgage. Yes, a tall order. But it’s not impossible – especially with some guidance.

To begin, before you write the letter, start brainstorming. Write down the reasons you’re seeking a short sale. This is where you come up with the reasons you can’t afford your house and need a short sale. This includes financial difficulties such as you lost your job, you got sick and have large medical bills, you were victim of a scam, your property taxes went up, you went through an expensive divorce, etc. At this stage you’re just brainstorming so that when it comes to actually writing the letter you don’t forget anything. Pick a few main points and then elaborate with specifics on each.

Example: I got divorced on January 2, 2010 and as a result child support and alimony added an extra $2100 per month to my expenses.

Writing the actual hardship letter

Like a resume, hardship letters shouldn’t be more than one page long. Don’t go on and on, just make the main points and summarize your plight.

Here’s the outline of 9 steps you should use for your hardship letter:

1. At the top type the bank’s name, address, phone and fax number (one per line) at the top of the letter.
2. Date the letter.
3. Type these words as the subject line (put on its own line): “RE: Request for short sale for loan # [insert loan #] and [insert address of property]
4. Open the letter with Dear [insert the name of the bank] Representative
5. State that your situation has changed from when you bought the house in [insert year]
6. Give some background into how the home’s value has dropped or the condition of the area which are out of your control.
7. Give more background with specifics about your situation and hardships.
8. State that as a result of the reasons you listed you cannot pay any longer and need a short sale. Be clear that you’ve run out of options.
9. Leave your contact information then sign, date and send the letter to the bank (or give to your real estate agent or attorney working with you on the sale.)

Short sale letter tip: While you want to show duress when writing your hardship letter, don’t over complicate things and go into too much detail. In some cases, “less is more.”

Tagged as: hardship letter, Mortgage, Real estate, short sale