Writing a Hardship Letter: Questions that Sellers Should Consider


I review short sale packages for a living. It’s what I do. One part of the package that is interesting to me is the hardship letter.

In order to participate in a short sale, a borrower must have some sort of hardship. The bank actually requests a copy of a hardship letter.

The reason that the hardship letter is interesting to me is because it’s a tell—like in poker. It shows exactly where the seller is at with regard to their mortgage, their home, and even their emotional state. Some hardship letters are longer than my kids’ book reports, and others do not share enough information.

There needs to be a middle ground. The hardship letter for the short sale package does not need to be a novel, or even a short story. It is a short letter that explains what has happened to the borrower or what has changed since the borrower purchased the property. Essentially, why can’t the borrower afford the property any longer?

Here are some questions that sellers should consider when writing a hardship letter:

  1. What is the hardship? (i.e., job loss, mortgage rate increase, decrease in hours, divorce, illness, etc)
  2. What has changed about the situation from when the property was purchased or the mortgage was obtained?
  3. What are the borrowers’ assets and will they be used towards the short sale? (Why or why not?)
  4. Has the borrower explored loan modification or bankruptcy or any other options for avoiding foreclosure?

A strong hardship letter is short and succinct. It explains the situation in five to seven sentences in such a way that the bank employee can understand and empathize. It is legible and, of course, it is in English. (yes, I’ve seen hardship letters in Spanish, French, and even Tagalog).

Photo: flickr creative commons by adamcroft

About Author

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®. Before landing real estate, she had careers in education and publishing. Many folks say that Melissa is genetically pre-disposed to success with short sales. In fact, last year she and her staff obtained over 500 short sale approval letters! When she isn’t speaking with lien holders, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


  1. As depressing as that must be, it must also be fascinating to read a person’s big financial tragedy boiled down to 5-7 sentences. Out of curiosity, and you don’t have to answer this of course, is there much variety in the description of hardship? Or are most of them the product of one or two biggies – like divorce/bankruptcy, etc?

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