Short Sale Stats/Study
A new report by CoreLogic says short sales have tripled to 400,000 across the nation since 2008. This means that the number of yearly short sales nationally has grown by three times in two years.
Interestingly, over half of the short sales happen in four states: Florida, Texas, California and Arizona. The average amount of these losses is $41,000 per transaction – which shows why it’s important to make a good case. The bank has a lot to lose! Your hardship letter is an important component in the process.
Hardship Letters
As part of the process of arranging a short sale, you must write a Hardship Letter to the bank. We referenced this important step recently with 7 things to do for a short sale. This is an important step because the bank will look at the letter to help them decide whether or not to grant the sale.
Purpose of a hardship letter
The purpose of a hardship letter is to tell the bank about your personal situation and hardships and request permission for a short sale. As we mentioned, the process of getting a short sale can be long right now. Many banks are getting 500 to 1000 requests every day. You need to show that you’re deserving but don’t make it too complex or long (remember, banks are going through stacks and stacks of letters every day).
The reason you write a hardship letter is to show the bank that you can no longer afford to pay your mortgage. They will obviously lose money if they grant a short sale and are therefore reluctant to grant one unless they feel it’s the last resort to protect their investment.
In the next post I’ll go over the essential components of a hardship letter.
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