The short sale hardship letter is the most integral part of the real estate short sale package. Short sales are sometimes offered to homeowners facing foreclosure who do not qualify for a loan modification. In this type of financial agreement the lender allows homeowners to sell their home for less than is owed on the mortgage balance.

A well-written short sale hardship letter can drastically improve the homeowner's chance of having their short sale offer accepted. Therefore, it's crucial to take time to compose a heartfelt letter that outlines details of what caused the homeowner to become delinquent on their mortgage payments.

Lending experts suggest banks receive up to 100 short sale offers every day. These same experts state only one out of ten proposals are accepted. In order to rise above the crowd it is imperative to write a short sale hardship letter that is honest and touches the emotions of the loss mitigator who reads it.

Before a homeowner can apply for a short sale, they must first contact their lender's Loss Mitigation Department. Individuals who work in this department are known as Loss Mitigators. Each homeowner is assigned a personal mitigator to oversee their account. The mitigator will work with the homeowner to resolve the situation. Typically, loss mitigators will offer other options such as a loan modification before allowing the borrower to apply for a short sale.

Once the homeowner receives approval to apply for a short sale, they will need to submit numerous documents. Short sale requirements vary from lender to lender; however, most require the following information:

1. Financial Statement detailing the Borrower's income and expenses

2. Short Sale Hardship Letter

3. Checking, savings and investment statements

4. Current tax return

5. Real estate listing information

6. Signed real estate sales contract

7. Estimate Settlement Statement (HUD-1)

8. Proof of buyer's financing

The contents of the short sale package must prove to the lender the Borrower is incapable of maintaining their mortgage payments. Compiling necessary information prior to writing the short sale hardship letter can provide beneficial insight that can be used to compose the letter. Doing so can help the homeowner recall events that caused them to become delinquent on their mortgage note.

Mortgage experts suggest writing the short sale hardship letter by hand. They claim a handwritten letter on notebook paper is effective in sending the message of "I need help." Others recommend typing the short sale hardship letter. This is especially true if you have illegible handwriting. There is no wrong or right way to write the hardship letter. The goal is to convince the lender to accept your offer through your words, whether they are hand written or typed.

Use a business format when composing the hardship letter. At the top include the date, your name, address and phone number. Next include the name of the lender and your loan number. At the end of the hardship letter include your signature and the signature of any co-signers, if applicable.

The body of the hardship letter is used to tell your story. This is the place to explain the series of events that caused the financial hardship. Make an outline of the events and only include the most important aspects. You do not want to provide every detail or write a book. Instead, keep the hardship letter to no more than two pages in length.

It may take several attempts to craft the perfect hardship letter. Be certain to proofread and check for spelling and grammar errors before sending to the lender. Close the short sale hardship letter by expressing gratitude and thank the lender for taking time to review your letter.

If you believe short sale is a good option for you, consider working with an individual who specializes in real estate short sales. They can assist you in organizing your offer and become involved in negotiations with your lender.

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