What is a Hardship Letter For A Short Sale Package?

We often get this question about what is a Hardship Letter For A Short Sale Package or how to craft one.  The hardship letter has changed over the past 4 or 5 years.  In the beginning these letters were supposed be handwritten, drama filled reasons you needed to be a candidate for short selling your home.   Banks would review these letters and ultimately be able to classify them into “boxes.”  Such as “loss of income” or “increase of expenses.”

In the past few years, the banks have “streamlined” some of the processes and one of them is the hardship letter.  Now, these “letters” are more like disclosure statements that help the bank determine which box to check for you.  “Divorce,” “Loss of Job”, etc all fall into this category for a hardship letter for a short sale package.