In addition to writing a hardship letter, If you are seeking the cooperation of your lender with a short sale you are going to have a prove a financial hardship. Fannie Mae has a form for that called Form 710.
Among the types of hardship that may help you qualify are:
- Lost of job
- Reduction of Income
- Increased housing related expenses outside of your control
- Disaster impacting the property or your place of employment
- Disability or illness
- Divorce or legal separation
- Separation of borrowers unrelated by marriage
- Distant employment transfer/relocation
- Other
Here’s a link to the form on the Fannie Mae site.
Even if your lender doesn’t use this particular form you will almost always needs to submit a hardship letter. The purpose of the letter is for the borrower/seller to explain the situation that has created the financial hardship.
This is not the time to say you want to “keep the house” as that might cause the servicer to try to do a modification or workout with you and delay the short sale.
The hardship letter should be in your own words and basically community three things:
- I’m sorry
- Here’s my situation (explain the job loss, illness, divorce, etc. that’s created the hardship.
- I have no other options. Without a short sale I’ll just have to let it go into foreclosure.
Keep the letter short, no more than one page. Be brief, clear, concise, and make sure your hardship is verifiable.
