Who is responsible for writing a hardship letter to the lender?
It’s the homeowners responsibility to write the letter or obtain help from a real estate investor if one is involved. The real estate investor can offer valuable experience and samples of hardship letters for homeowners to write a letter.
The hardship letter should be personal and give the homeowner a chance to get a lender to accept the smaller amount from the short sale.
A well written hardship letter is moving and personal, but also includes complete backup of the proofs of that hardship. 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 smaller amount than pursuing a foreclosure.
The hardship letter is quite important to the short sale package delivered to the lender. So, to receive an approval from the lender, the letter must be compelling and very descriptive at explaining why the borrower has defaulted on their loan. The borrower will need to give dates, reasons and really make an attempt to play with emotions.
Here are a few reasons WHY a borrower may default on a loan:
Death
Job Transfer
Divorce
Job Loss
Illness
The bank will ask if the problem is temporary or something with lasting effects. If something appears to be a permanent situation, the bank will look at it from that perspective.
Keep the letter under 2 pages and ideally only on 1 page. It’s also a good idea to have the homeowner hand write the letter and sign it at the bottom. Write a kind, courteous letter with some compassion as an actual human will be reading the letter and may have a part in the decision making.