How to Write a Hardship Letter for Short Sale

If you are no longer able to make your monthly mortgage payments and want to avoid possible foreclosure, a short sale might be your best option. A short sale means that you sell your house for less than what you owe on the mortgage and your lender forgives the difference. As part of the short sale process, your lender may require you to write a hardship letter, outlining the reasons why you are requesting they consent to a short sale. Knowing how to write your hardship letter is important because it can determine whether or not the lender agrees to the short sale.

Getting Started

Before you begin the main text of your hardship letter, you want to make sure it is addressed properly to the lender. You may choose to include a reference line stating your account number as well. Begin your letter with a formal salutation and a brief greeting referencing your account. State your name, account number, the date your loan originated, and the address where the property is located.

State Your Purpose

Open the body of the letter by expressing regret that you are having to write it in the first place. Explain to the lender that you are experiencing difficulty in meeting your mortgage payments and to avoid further financial hardship, you are proposing a short sale to resolve your debt. You are essentially asking your lender to forgive a portion of your mortgage debt so you need to convey that you are only making the request out of a true need.

Provide Background

Provide a brief history of the events leading up to your current financial hardship. Be specific in your information, including dates, and order them chronologically. Job loss, divorce, illness, an unexpected move, are all examples of the types of things you should include if they are relevant to your situation. You need to give the lender sufficient information to justify why they should grant a short sale. Be truthful in your accounting of the facts as you must be able to provide evidence or supporting documentation for any claims you make.

Demonstrate Good Faith

Make it clear to the lender that you do not want to go through a short sale but you realize that you are unable to pay. If you've attempted to refinance, to sell your home, or applied for a loan modification but been denied, include this information as well. You want to make it clear to the lender that you've pursued every available option and that a short sale is a last resort to avoid foreclosure and/or bankruptcy.


End the letter with thanks and express your appreciation to the lender for taking the time to consider your situation. Advise them that if they have questions, they should not hesitate to contact you. Include all relevant contact information and attach any supporting documentation relevant to your financial hardship.

Things to Avoid

Do not blame your financial situation on the lender or give false information. Omit irrelevant information and unnecessary backstory. You want to gain the lender's sympathy but you don't want to come off as a helpless victim with no responsibility.

When writing your hardship letter for short sale, be brief and to the point. Stay on topic and state only the facts relevant to your situation. An effective, well-written hardship letter can make all the difference between short selling your home or losing it to foreclosure.

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Lorena Williams
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Posted on Jul 21, 2010