If you need information on Denver short Sale Financial Hardship rules be sure to read through this article. If you need information on short sales in general, I have another post here you can refer too.
Part of the short sale process is showing that you are in financial hardship and sometimes that you are avoiding major hardships by making this tough choice to short sale your home.
The bank or mortgage company doesn’t just want to sell off the house at a lower price then the remainder of your mortgage. However, going to foreclosure brings a whole other set of issues for them. So if the owner of a home is headed or in the depths of financial hardship they may grant you the short sale to stop it from getting any further in the process.
How Do You Prove Financial Hardship
The tricky part of a short sale is that often you won’t know if you can qualify or not until you are in the process. You may have already missed payments, you might have a contract from a investor or buyer on the table, until you start submitting your paperwork it is hard to know whether you will get accepted or not.
Proving Financial Hardship is a big part of this process.
Writing a Hardship letter or Hardship Affidavit – This is quite often the first step to proving hardship. In this letter you will need to explain why you can no longer make your mortgage payments and why you can’t afford a traditional sale. This letter can include things like loss of employment, having to move for employment, divorce, death of a spouse, medical expenses, natural disaster and/or incarceration. It may also include reasonings like your taxes, insurance and HOA going up beyond a price that you can afford. This letter has to convince the lender that you can no longer afford the home and it is detrimental to your financial situation current or future.
- Proof of Financial Hardship
- Once the lender/mortgage company has received your letter, they will likely ask for the following:
- Most Recent Mortgage Statement (I know, you think they could look this one up)
- Recent HOA Statement
- Property Tax Bill
- 710 Form with Your Financial Information Filled Out
- Supporting Financial Information
The supporting Financial information could contain the following
- Pay Stubs
- IRS FORM 4506T
- Bank Statements
- Tax Returns
- Credit Card Statements
You will want to have all of these on hand and ready to go before the process starts so as they ask for them you can quickly submit them.
Different Banks, Different Processes
As a short sale agent I have experienced the ups and downs of dealing with the banks. Each bank, mortgage company has a different process. Some you will deal with them directly. Others will use a portal to submit information and have a 3rd party running things behind the scenes. Some banks you can easily escalate a problem, others it is hard to get someone on the phone or via email. Some will direct you easily through the process and others it will be like pulling teeth.
If you do choose to do a short sale it is best to use a real estate agent or legal advisor that has experience. Short sales at the best of times are a lengthy process. YES THIS WILL TAKE MONTHS. You can expect approval of a short sale contract to take upwards of 3-4 months and sometimes 12+ months. This will not be a quick out. However, if you are facing financial hardship due to your home then a Denver short sale financial hardship may be the best way to sell your home without causing long term damage to your credit and finances.
Need Help with Your Denver Short Sale
Please note this is purely informational and not legal advice. If you are thinking of skipping payments and starting the short sale process, let’s chat first! I want to help you look at all your options so that you make the best decision with the least impact for you. info@haleybartlett.com
