What is an acceptable hardship for a short sale

To quality for a short sale is different that from a traditional listing. The main difference is in order for the bank to even consider a short sale, the homeowner must be able to document the financial hardship. This is done through documentation that the bank will require along with a hardship letter that is provided by the homeowner explaining the hardship and how they got to that point.

A hardship is a condition that is difficult to endure;suffering;deprivation;oppression; or an instance or cause of this;something hard to bear, as a deprivation, lack of comfort, or constant toil or danger (Ref:Dictionary.com). For a homeowner this is a material change in their financial circumstances that affect the ability of the homeowner to keep current or to pay their mortgage. This hardship could be something that is in the near future (divorce, job loss, loss of income, etc.).

A seller must have a hardship in order to qualify for a short sale. A hardship is not a homeowner is mad that they bought their home 3 years ago, the identical home next door just sold for substantially less than what you paid for your home, and you want to walk away. Doesn't work that way. You can still list the home as a traditional listing and sell the home!

A hardship could include the following;

• loss of job
• business failure
• damage to property
• death of spouse or family member
• severe illness
• inheritance
• divorce
• mandatory job relocation
• medical bills
• military service
• mortgage resets
• insurance, tax, association increases
• reduced income
• separation for spouse
• too much debt
• incarceration

The lender will look for in your hardship letter a circumstance that created your financial hardship. You have to be able to prove this. Your circumstance could still qualify you for a hardship if it is not on the above list. Keep in mind, it has to cause a financial hardship on you to qualify for a short sale.

Kenden Post-CDPE, ePro

Coldwell Banker Burnet-Apple Valley, Minnesota

www.OurFirstMinnesotaHome.com

Kenden@KendenPost.com

(o)952-997-1960, (f)952-997-8810, (c)612-310-6304

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