The Hardship Letter – Create Your Voice & Your Bank May Just Listen

Any Loss Mitigation Professional will tell you that running an efficient short sale [or loan modification] campaign is no simple task to perfect.   It all starts with the assembling of the application, chalked full of homeowner hardship materials and real estate transaction documents.  When all said and done, the initial package submitted to open lien holder review averages out to 60 + pages of documentation, with enough stuff to keep any bank negotiator busy for weeks on end.  The sheer magnitude of each short sale application lends one reason why the short sale process tends to take 45 – 60 days to generate lender approvals for Equitable Reality & Services’ negotiators, a time frame which can grow significantly for lesser experienced, short sale agents or negotiators. 

For this present article, I want to hone in on just one item within the short sale package - The Hardship Letter.  The hardship letter can be regarded as the cover page for the entire application, and if well constructed, will establish a foundation upon which your loss mitigation case can be built.  It need not be a ten page biography, nor should it be a solitary, fragmented sentence without backbone.  A well-crafted hardship letter should fit on a single page, and concisely identify:

1. personal account info [account holder names, loan account numbers, property address]

2. the homeowner’s current financial difficulties

3. the homeowner’s intent to sell their property via shortsale [or, if applying for a loan modification, the homeowner’s request for modification consideration]

If done properly, your letter will give your bank negotiator perspective, a narrowed tunnel vision through which he or she can review your financial materials.  It’s not the letter itself that drives the decision process ; it’s the financial materials which speak up for themselves.  But it’s the hardship letter that gives this collection of pay stubs, bank statements, financial statements and tax returns a unified voice.  In an industry with so much competition, with bank departments inundated with applications, a finely-tuned voice will help you set yourself apart from the deafening crowds.

Please click on the link below for a hardship letter sample http://www.equitableres.com/samplehardshipletter.pdf

In total, six key features are identified in the sample:

1. date of letter

2. item appropriately labeled as ‘Hardship Letter’

3. personal account info identified

4. homeowner current financial difficulties identified clearly and concisely

5. request for short sale consideration clearly documented

6. signed and dated