Reasonable Hardships For Short Sales
Why would your lender consider doing a short sale with you? A hardship on your part that will keep you from being able to make the monthly payments.
Most but not all of the time your lender is going to require some kind of hardship in order to complete a short sale. In other words you are going to need to qualify for a short sale in order to complete one.
Among many documents your lender will request in looking at your short sale request will be a hardship letter that explains why you are unable to continue making the payments. The hardship letter will be one of the determining factors on whether a short sale is approved or not.
It can make sense to a lender even when there is not a financial hardship on the borrowers part to grant a short sale approval, but it is less likely. In this case you can almost be certain the lender will either ask you for a cash contribution at closing or sign a promissory note. It may even be a combination of the two.
Any of the following will typically qualify as a legitimate hardship for a short sale:
Reduced income from a borrowers extended job loss, disability, illness, or just fewer hours available at work that a causes the inability to keep making payments.
Marriage Challenges - Separations and divorces are honest reasons a lender will look at a short sale.
Expenses that have increased - Reasons could include an increase in dependents, an illness, etc.
Debts rising beyond control - charge cards bills (but make sure this wasn't from over spending on bigsreen TV's or designer purses), healthcare bills, legal fees and other similar types of money trouble.
Death - Death of a borrower on the loan resulting in an inability to keep making the payments. Also the corresponding loss of income or medical bills associated with the death such as funeral expenses, etc.
Relocation for employment - The relocation must be due to a job change and lenders also typically require the move to be over 50+ miles.
Armed Forces service - Your lender may consider being activated a hardship. You know it is, so you will need to document why it will be for your family.
Most but not all of the time your lender is going to require some kind of hardship in order to complete a short sale. In other words you are going to need to qualify for a short sale in order to complete one.
Among many documents your lender will request in looking at your short sale request will be a hardship letter that explains why you are unable to continue making the payments. The hardship letter will be one of the determining factors on whether a short sale is approved or not.
It can make sense to a lender even when there is not a financial hardship on the borrowers part to grant a short sale approval, but it is less likely. In this case you can almost be certain the lender will either ask you for a cash contribution at closing or sign a promissory note. It may even be a combination of the two.
Any of the following will typically qualify as a legitimate hardship for a short sale:
Reduced income from a borrowers extended job loss, disability, illness, or just fewer hours available at work that a causes the inability to keep making payments.
Marriage Challenges - Separations and divorces are honest reasons a lender will look at a short sale.
Expenses that have increased - Reasons could include an increase in dependents, an illness, etc.
Debts rising beyond control - charge cards bills (but make sure this wasn't from over spending on bigsreen TV's or designer purses), healthcare bills, legal fees and other similar types of money trouble.
Death - Death of a borrower on the loan resulting in an inability to keep making the payments. Also the corresponding loss of income or medical bills associated with the death such as funeral expenses, etc.
Relocation for employment - The relocation must be due to a job change and lenders also typically require the move to be over 50+ miles.
Armed Forces service - Your lender may consider being activated a hardship. You know it is, so you will need to document why it will be for your family.