Capital Redevelopment Group - Jeff Coga - Short Sale Hardship Letter Explained

8/4/2019 Capital Redevelopment Group - Jeff Coga - Short Sale Hardship Letter Explained

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Copy Right All Rights Reserved | www.GetCRGNo

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Publisher: Jeff Coga


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Copyright NoticeAll rights reserved. No part of this publication may be reproduced or transmitted in any form orby any means electronic or mechanical. Any unauthorized use, sharing, reproduction, ordistribution is strictly prohibited.

Legal Notice

While attempts have been made to verify information provided in this publication, neither theauthor nor the publisher assumes any responsibility for errors, omissions, or contradictoryinformation contained in this document.

This document is not intended as legal, investment, or accounting advice. The purchaser orreader of this document assumes all responsibility for the use of these materials andinformation. Capital Redevelopment Group LL and his, hers, their, or its agents, servants,successors, heirs, executors, administrators, and all other persons, corporations, firms,assumes no responsibility or liability whatsoever on behalf of any purchaser or reader of thesematerials. The Content herein is Copyrighted by Capital Redevelopment Group LLC 2009. AllRights Reserved.

Prepared by: ShortSalesBuyers.com

This handout is based upon industry knowledge. Last updated January 13, 2009. While this publication isdesigned to be accurate and current information, readers should consult an attorney or other expert foradvice in particular.

For any questions or concerns please email: [email protected]

2009 www.GetCRGNow.com


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WHAT IS A HARDSHIP LETTER?

A hardship letter is a written explanation as to what event has caused you to fall behindon your mortgage and it vital in helping you stop foreclosure.

This letter acts much like an outline or biography of your current life issues that are

affecting your ability to meet your financial obligations.

What is a good format to use? I recommend the five paragraphs, one page essay with a

bullet list of key points for lenders in a hurry. Begin by stating your current situation in one or two

sentences. Then add a sentence that tells the reader when things began to deteriorate, such as

a job loss or illness. The final sentence in the first paragraph should contain your desired

outcome or action: state clearly that you are willing to work out a solution and that you want to

retain ownership of the house or property.

After the first paragraph, a bullet list can help the reviewer make a quick and accurate

assessment. The list should contain typical items used by lenders to make their decisions.

Choose one or two reasons for the hardship. Here is a short list of typical reasons:

Adjustable Rate Mortgage Reset- Payment Shock (uncommon, but we

will see more lenders accept this in the future)

Loss of Job

Illness

Bills Reduced Income

Divorce

Medical Bills

Too Much Debit

Death of Spouse

Payment Increase

Failed Business

Job Relocation

Damage to Property (natural disaster or unnatural)

Military Service Incarceration

Other (Please Specify)

The list should also include the amount of the loan and the number of months behind.

When you look at this list, remember that some reasons are better than others. If you can, list a


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combination of reasons and emphasize the reasons that might appeal to a lender. If there is

another important fact, include it, but dont make the list too long. You are trying to keep the

letter to one page.

After your bullet list comes an opportunity to add two or three paragraphs to providemore detail about your situation. Describe yourself in a bit more detail. Are you single or

married? Do you have kids? Did you grow up in the area? How do you see your future? Is the

change temporary or permanent? Will you be making changes in your life? Accountants reading

this might say, good grief, go on Oprah, but most of them will stop reading at the bullet points.

This part of the hardship letter is both for the lender and you. In a stressful time it is difficult to

have perspective on things taking place in the present. This part of the letter will clarify your

unique situation for yourself as well as the lender and may become the determining factor in

your short sale.

The final paragraph, should restate your hardship and your desire to keep the property

along with a simple thanks for taking the time to read this letter type finish.

When you create the heading do not address the letter To Whom It May Concern! Try

to find out the name of the individual that will be reading the letter. If that is not possible a simple

Dear Sirs is more dignified. Dear Lender works as well.

Lenders are reviewing thousands of applications and may of the applicants are in similar

circumstances. A good hardship letter can make you stand out from the pack.

Here is a template below that you can use as a boiler plate for your own letter. Make

sure you make it unique to your situation.

Remember that your hardship letter is only one piece of the loan workout process, but

key in short sale approval.


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HARDSHIP LETTER STRUCTURE

Please do not use the example below unless it strictly pertains to your situation.

Your hardship letter should appear similarto the following:

From: Your Name Name of Loan Co-Signer (if applicable)

Subject: Mortgage please include mortgage number(s) and bank names (if you have

more than 1 mortgage or more than one property just list them all here at once)

Date: Todays Date

To Whom It May Concern:

MUST HAVE #1: Introduction What happened?

Please state the circumstances of your financial hardship and include the following

Explain your hardship situation: Tell your lender the reason(s) you fell behind on your

payments.

Explain how your situation has changed so that you will be not be able to make future house

payments. Include information about any money you have saved, workouts you have tried,

finding a new job, etc

Explain how you are currently surviving: living with family, renting rooms out, working a 2ndjob, borrowed money, family etc.

Example:

Reason I went into foreclosure is______________. (Please be VERY specific as to

what happened and why you got into this situation; this will help get to the banks

emotions).

MUST HAVE #2: Condition of Property

As a result of the above circumstances I do not have the financial resources to make good on

the past due balance on the mortgage or make the monthly payments. Also, the house is in

need of the following repairs:

IMPORTANT NOTE: List your repairs - once again, please be specific putting yourself

in the shoes of a very picky buyer helps. Put what needs to be repaired and try to

include, if applicable why.


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Possible Repairs:

Carpet/Flooring my kids spilled food/drink and it is disgusting. Paint my dog has scratched the coat off, hand prints, spills etc.

Windows- have not been updated

Water heater - is over 9 years old

Roof - is over 9 years old

Original Kitchen cabinets all my neighbors have upgraded ones

Holes a fight broke out, door slammed, furniture fell

Door does not close right possibly a foundation problem

Dry rot or wood rot

Termites

Bug infestation Mold typically in bathrooms

Cracks name where

Land Scrapping dead grass, weeds, etc

Since Im in dire straits, I cannot afford to make the necessary repairs either.

MUST HAVE #3: Closing

Our home was appraised for $430,000 three years ago but the real estate agents have told me

that our home will only sell for $250,000. I currently owe a total of $423,000 on our home. Thehouse is not worth what I currently owe. I went to seek legal counsel because of my hardship

and they said I can file bankruptcy and live for free for 6-12 months, if this short sale is not

approved. Hopefully, you can work something out with the person interested in buying my house

for less than what its owed. Please help me move on with my life.

Thank you for your time and I hope we can have this matter resolved soon.

Sincerely,

(Print Name)(Your Signature)


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Capital Redevelopment Group - Jeff Coga - Short Sale Hardship Letter Explained