short sale package
The must know tool to be used when in foreclosure is the short sale. Usually the bank will send you a list of all paperwork required for the submission. This list varies slightly for different lenders, but they all include the hardship letter. Your lender wants to know what happened to you, especially if you have been current on your payments for years. Here are some useful tips for preparing your hardship letter.
Tip #1: Make it emotional. Tell your story as if you are talking to a friend. Point out that you want to keep the house but cannot afford the payments.
Tip #2: Anything you state in the letter should be backed up with a proof. For example: if you have large medical bills, then provide doctor’s letters and bills. If you have been laid off, include the termination letter from employer. If there has been a divorce, provide a decree.
Tip #3: Include the following text: “My attorney keeps telling me that I should consider filing bankruptcy, but I do not want to destroy further my credit.” The banks do not like bankruptcy, because to them it is a forced forbearance agreement for many months, may be years.
Tip #4: Point out all of the repairs needed to bring the house to market condition. It is a good idea to prepare an estimated list and cost of repairs. You can call a handyman and he can give you the estimates for free. Check your local newspaper for handyman services.
Tip #5: Mention about your efforts to sell the house. The text should be something like that: “I have been trying to sell the property through a real estate agent and on my own. I have spent money I could not afford to advertise in the newspaper. This is the only offer I got.” It is a good idea to list the house with real estate agent in order to demonstrate activity. You can easily cancel the contract if you are not happy with their services.
The hardship letter is an important component of the short sale package. However, the first and most important factor is to have a buyer.
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Ken Wood of Win Win Short Sales – How to prepare a short sale package for the bank