I want to do a short sale and the bank says I need to
display a hardship. What counts as a
hardship?
A hardship is a situation that renders a borrower unable to
continue making monthly mortgage payments and/or unable to sell their property
and cover the entire mortgage balance.
What are Legitimate
Hardships?
Legitimate hardships include:
- The death of a breadwinner.
- Serious illness of a breadwinner.
- Serious illness of a family member, whereby the income earner(s) in a
family take time off work to care for the person.
- Serious damage to or a material defect with the property that will not
be covered by insurance.
- Loss of a job.
- Reduced hours at work, which lowers a person’s take-home pay.
- Loss of a job by one of the two people in a dual-income household.
- A forced job relocation, typically more than 100 miles away.
- A divorce, typically one that involves a sharp decline in income and/or
significant reduction in liquid assets.
What Situations Do
Not Qualify as Hardships?
Situations that are not hardships include:
- Desire not to pay, even though the borrower has substantial income or
assets.
- Decline in property values (in some areas of the country, like
California, Arizona, Florida, and Nevada, the decline is so sharp that it may
qualify as a hardship).
- A break-up between a boyfriend and girlfriend who were both on the
mortgage.
- A person who has substantial liquid assets and who therefore could
easily pay the difference that is owed.
- Depression experienced by the borrower.
- A person who is angry at the bank and wants to stop paying to make a
point.
If there is no hardship, then it is extremely unlikely that
a short sale will be approved.
If you believe you are a candidate for a Short Sale, contact
me to discuss how we can help you get through this difficult time and avoid
foreclosure.
Reprinted from the
website “Significa Short Sale Solutions” with permission.
