Few people purposely wish to suffer through the pain and humiliation of losing a home through foreclosure. There are many alternatives to bankruptcy and stopping home foreclosure for owners unable to keep their mortgage payments current. One such option is known as a "short sale." It means a lender is willing to accept less than the total amount owed on the loan. One key element involved in the short sale process is the hardship letter.



Most mortgage companies or lenders require the hardship letter pursuant to a short sale. The homeowner should not waste this valuable opportunity to appeal to the lender for another chance. It is also prudent not to waste time and engage in finger-pointing as it will only make your already tenuous situation worse, and lender may well deny your request for a short sale. In the hardship letter just present the facts clearly and above all else be honest. The hardship letter must be able to prove the situation that caused you to fall behind was temporary and you are now in a position to make your payments on time. The excuse for falling behind must be legitimate and provable. Situations such as job loss, prolonged personal illness, or a death in the family are all acceptable reasons to fall behind on your mortgage payments.

Who is responsible for writing the hardship letter to creditors?

A homeowner may write the hardship letter themselves, hire someone, or get help from a real estate investor if one is involved. The real estate investor can offer valuable experience and samples of hardship letters for the homeowner to create their letter. Ultimately it is the homeowner who is responsible for the letter, its content and accuracy of information.

Hardship letter writing tips.

You are going to have to get personal in your hardship letter. At this point in the process the homeowner should be fairly immune to any embarrassment involved with telling their story. This is also the homeowner's opportunity to implore upon the lender to accept the smaller amount from the short sale. A well-written hardship letter is moving and personal and contains full back up proofs of the hardship.

The more time, and the better the hardship letter is composed, the easier the short sale is going to be. The best hardship letter will convince the creditors that the homeowner's situation is genuinely distressing and the lender would be better off accepting the lesser amount than pursuing a foreclosure.