If you’re pursuing a short sale, your lender will ask for a hardship letter. It’s a short, honest explanation of why you can no longer afford your mortgage, and it’s one of the most important documents in your short sale package. A clear short sale hardship letter helps the lender’s reviewer understand your situation quickly, which can help keep your file moving.
What is a hardship letter?
A hardship letter is a one-page letter from you to your lender. It explains what changed in your life, why you can’t keep up with the payments, and why selling for less than you owe is the best outcome. The lender reads it alongside your financial documents to decide whether to approve the short sale.
Common hardships lenders recognize
Job loss or reduced income, divorce or separation, medical bills or disability, death of a spouse or co-borrower, a job relocation, a business failure, or a large increase in your payment. You don’t need a dramatic story. You need a true one that matches your paperwork.
What to include in your short sale hardship letter
Your name, property address, and loan number. When the hardship started and what caused it. How it affected your income or expenses. What you’ve already tried, such as cutting costs, a loan modification, or selling at full price. Why you can’t recover in the near future. And a clear request: that the lender approve a short sale.
Tips for writing a hardship letter that works
Keep it to one page. Be factual and specific, with dates and numbers where you have them. Make sure it matches your bank statements and pay stubs, because reviewers check. Avoid blaming the lender, and skip details that don’t relate to your finances. Sign and date it, and have every borrower on the loan sign too.
A simple hardship letter example
“I’m writing to request approval of a short sale on my home at [address], loan number [number]. In March, my employer closed my department and I lost my job. I found new work in June, but at about 35% less income. I’ve cut household expenses and used my savings to stay current as long as I could, but I can no longer afford the payment. The home is worth less than I owe, so selling at full payoff isn’t possible. I’m asking you to approve a short sale so I can resolve this debt responsibly.”
Use this as a starting point only. Your letter should reflect your actual situation in your own words.
Get help with your Denver short sale package
The hardship letter is just one piece of the lender package. Denver Short Sale Pros helps homeowners put together a complete, accurate package so the lender has what it needs the first time. Request a free, confidential consultation on our Sellers page or call 720-261-0754.
This article is general information, not legal or tax advice. Short sales are subject to lender approval.
