What Does The Bank Consider a Legitimate Short Sale Hardship?

Las Vegas, NV – September 30, 2011 – (RealEstateRama) — After closing hundreds of short sale properties in Nevada, the biggest question we get asked from homeowners is, “Do I have a hardship and will I qualify for a short sale?” While each person’s financial situation is unique, the fact remains that practically everyone in Nevada is experiencing hardship to some degree. Let’s face it, our homes have lost more than half their value, and our state leads the nation in foreclosures and mortgage defaults.

While we can all agree that the majority of Nevadans are facing hard times, this will not be enough to convince the bank to forgive you from your mortgage obligation. You will need to come up with some facts and evidence to show the bank that your hardship is legitimate. Hardship can be defined as an increase in your expenses and/or a decrease in your income. You do not need to be poor to qualify for a short sale. In fact, actor Nicolas Cage successfully completed a short sale on his Las Vegas home, and he makes millions of dollars each year.

When you inform your bank that you are considering a short sale, the first thing they will do is look at the financial documents which you submitted when you bought the house. Unless you paid cash for your home, you had to qualify for a loan, and you submitted pay stubs, tax returns; W-2’s and bank statements to your lender showing that you could afford the mortgage payment. When you apply for a short sale, you will be asked by your bank to provide a current set of the same financial documents because the bank will want to see what has changed in your financial situation that is preventing you from fulfilling your mortgage obligation. Your lender will compare the two sets of financial documents, however, numbers only tell part of the story. This is where you will need to prepare a convincing hardship letter to plead your case.

After assembling hundreds of short sale packages we have found that more than any other document, the hardship letter can make or break a short sale. While banks care most about dollars and cents, it is important to remember that the package will be reviewed by an individual loss mitigator. Like the rest of us, this loss mitigator is a real person with real emotions who cannot help but be influenced by a sincere story of hardship.

It is important that you put some effort into writing the hardship letter. The borrower should write the letter in their own words, but they need to make sure that there is a clear picture of their financial condition, and back up their claims with documentation, such as pay stubs, proof of reduction in hours at work, illness, medical bills, job layoff letters, and more. Inability to rent your property, marital difficulties and military service can also be considered a hardship. The numbers should clearly illustrate that the borrower is headed for foreclosure or bankruptcy. This will motivate the lender to cooperate.

Lenders are all about numbers, so the letter isn’t a sob story about the borrower’s difficulties. It should be a factual description of a financial situation that is leading up to a bankruptcy or a foreclosure on their home, or both. The lender must be convinced that their only other option is foreclosure, and then they can analyze the numbers to see if a short sale is a preferable alternative.

The short sale hardship letter can be typed or handwritten, but we have found that handwritten is most effective. It should contain some standard elements at the top of the letter including the name of the borrower(s), the date, the lender and the loan number. The end of the document should have the borrower’s signature with the date, as well as the signature of any co-borrower. The length is not important so make it as long as needed to have the desired impact.

In 2010, The Myers Team sold more short sale listings than any Realtor or Broker in Nevada. Myers Team Owners, Bill and Francoise Myers have helped hundreds of Las Vegas families avoid foreclosure. Myers said, “Sellers facing foreclosure must remember that banks are not looking out for you or your family. When you work with The Myers Team, our job is to get between you and the bank. We represent our clients, NOT the banks. It is our job to take away the stress and negotiate the best possible outcome. Ultimately, our job is to help our clients get a fresh start.”

Visit The Myers Team web site at http://www.NevadaShortSaleInfo.com

For Non-Short Sales, visit http://www.LasVegasList4Less.com