What is a legitimate hardship that the bank will accept?
All hardships are hardships and are difficult times in our lives. Hardships simply need to be explained to the bank.
The most common examples of hardships are:
- Loss of income,
- Disability or medical reasons, or
The most important part is explaining your hardship in a letter of explanation to the bank, and including all supporting documents validating the hardship.
Speaking from experience, we have yet to have a Short Sale declined by a Seller’s Lien Holder regardless of “legitimate” hardship. The key is being absolutely candid with regards to it’s either a Short Sale or it goes to Foreclosure. If the Borrower has assets the Lien Holders may request a contribution – however – even when such a request is declined by the Borrower the Lien Holders still approve the Short Sale if it’s in the Lien Holders best interest. The “Hardship” question is one of the “dirty little secrets that lenders don’t want you to know”.