One of the parts of a short sale package is the letter that the distressed home seller writes explaining why (with all supporting financial documentation) they are asking the lender for forgiveness of a portion of their indebtedness. Sometimes, sellers are angry...they can't put a face...make a call or in any way score a direct hit with the circumstances that have gotten them to this place in their lives.
If they have been downsized from a job...their boss is no longer there to answer the "Yes ...But...." reasons for why they should remain employed. The pink slip is the pink slip..that was then and the beginning starts now and as unfair as, it may be, the anger has to be extinguished and career plan B" begun.
The happily ever after marriage that was not to be...the sting of a spouse that strayed, that could not deal with whatever the condition was of for "better or worse...." the worse meant leaving the relationship and the house that had held the memories of their home was no longer affordable.
Devastating illness....the cancer or other disease that crippled the ability to earn the income that enabled the distressed sellers to stay in their home...it isn't fair...no illness is fair....the ravages of medical bills and depletion of funds due to the heaping and continual medical bills can exhaust even the strongest of sellers and their reserve funds.
The adjustable mortgage that adjusted more quickly than the seller imagined possible...that was not part of their financial plan.....re-financing with the equity that does not exist due to the decline in values is not a viable option.
It is not unusual in our experience to find a seller with more than one of these situations...sometimes several taking place all at once. You sympathize and you lend a hand up, a shoulder....offer every resource you know available and wonder how you would fair under their circumstances.
The hardship letter is meant to be just that...an explanation of why the mortgage cannot or has not been paid. The anger, the blame all the emotion that comes with hardship needs to vented another way.Blaming the former...boss, spouse, lender does not "make the case" for the hardship. It does, leave sellers stuck in the past and prevents them from taking a positive step toward a better future. Hardship is emotional...a hardship letter in our opinion is an explanation as part of a business proposition. Keeping it simple helps it to fall on more positive ears....and at some point, we hope, the healing begins and the once distressed seller starts on the road to a happily ever after life.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
I am of the opinion that the hardship letter should not be a requirement. The "upside down" fact and inadequate income to make mortgage payments should be sufficient.
The banks insist is stripping the strapped home owner of all dignity after they have lost their security.
Good morning Sally & David! Your story echos for many as we yet brace for another wave...
Interesting Lenn....that has not been our experience....people want to tell how they got where they are...it has not been a loss of dignity but rather a relief when it doesn't turn to blame...to say...I gave it all I had...and it happened despite that effort.
We will see what the future holds Michael....waves are different...real estate is local and we can always look for the best...
That letter is not of any consequence to the financial institution....it may be the first step in therapy for the seller to come to terms with the fact that they have lost their most valued possession....it's therapeutic.....the bank just wants their money and/or a means to recoup some of it.
Good information for home owners facing foreclosure.Thank you for the post.Have a good day.
This is a very hard time and it seems that stress is experienced by both the sellers and the agents!
I'm not sure I understand the purpose of the hardship letter, but I'm sure it's difficult for the sellers to keep the emotion out of that particular letter...........mixed feelings here, I see Lenn's point and Barbara's.
I have to respectfully disagree a little bit Barb...the bank does read the letter and can pick apart details..yes they do want the money...no question...the contents of the letter can be scrutinized and has been and since you never know when that happens..best to write the facts...that in turn becomes an emotional release for the seller. Hard times made easier Jay....not easy...but better. One of the very coooool things about this forum Roger is the mix of opinions...ours based on our experience and other people may have different ones...the letter is read, need not be nasty...and can be an emotional release not a slam to the ex wife, the lender, the former boss, etc.
Good Post. It is hard for the sellers. Banks are picking us details from the letter that maybe the bank statement or paystubs not reveal. Recently the fact that my sellers ate at McD alot was commented on by the negotiator.
Important to read the letters...mot just send them......keep it to the point...the point is..no money for the mortgage...
Suggested. One of the best posts regarding the hardship letter I have ever read. Bookmarked, too, for future reference. Thanks.
Thank you Suzanne.....it does matter what is said and how....and it's important for both sellers and their agents to recognize that....thank u for the "suggested" bouquet...we treasure it !
Excellent post and after reading the responses, I am conflicted as to how I feel about the letter. I tend to believe as Lenn does, however, I can see how it may be cathartic for the sellers.
The hardship letter is REQUIRED so it doesn't really matter how we feel about it. Short, apologetic and to the point is best. I can't help but think that at this point in time, it might also help a lender determine that a particulur situation ISN'T a strategic default....
Right Janna...we don't get to make the rules....just follow them in this case....and as long as a hardship letter is required...we have an obligation to make it the best it can be and have it work FOR the seller rather than against him.
Sally and David - I agree with Lenn but unfortunately until the rules change sellers will have to provide a hardship letter. Useful information to counsel seller on how to write the appropriate letter.
The letter can be a relief/release to the seller...not an ordeal ..it's part of our duty to educate and help sellers
And if your lender tries to get you to write a letter with false information in it to make it seem better, get yourself a new lender.
Not sure what that means....none of our sellers have ever been anything but honest...