Short Sales: How Long Should My Hardship Letter Be?

By Gerald Lucas

Before a homeowner sits down to write the hardship letter for their short sale application, they often ask me how long the letter should be. There are two schools of thought on how long a hardship letter should be. One school contends that a hardship letter should be as short as possible. The other school of thought is that a hardship letter should be lengthy, comprehensive and very detailed. The second school encourages property owners to go into great detail about their personal history with their property, the circumstances that contributed to their financial problems as well as the steps that they have taken to deal with those problems.

I have read hundreds of short sales over the many years I have been negotiating short sales and I can say from experience that both arguments have some validity. On one hand, the first argument for the hardship letter being brief is correct in that most short sale departments at banks are overwhelmed with hundreds of files and the loss mitigators working on those files don’t have the time to read someone’s personal novel about their property. On the other hand, every property owner has a different situation and some personal stories may be more complicated and require a longer explanation.

The truth is that you don’t need to worry about how long your hardship letter is. The length of the letter is not nearly as important as making certain that your hardship letter is effective. An effective hardship letter must be complete and it always must be consistent with all the other supporting documents that you send to your bank as part of your short sale package. Complete means writing enough to identify at least one legitimate financial hardship making it difficult for you to meet your mortgage obligation. Consistency is important because your hardship letter creates a permanent record that could make things difficult for you later in the process or after the sale if you are seen to be contradictory or misleading.

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