If you're considering a short sale, one of the most important documents you'll submit to your lender is the hardship letter. It’s not just paperwork—this letter plays a major role in getting your short sale approved. In this post, we'll walk you through what to say, what to leave out, and why this letter can make or break your short sale case.
What Is a Hardship Letter?
A hardship letter is a personal statement explaining why you can no longer afford your mortgage. It's submitted as part of your short sale package and gives your lender context for your financial struggles. The goal? Show that your hardship is real, ongoing, and serious enough to warrant the bank forgiving a portion of what you owe.
Common hardships include:
> Job loss or reduced income
> Medical expenses
> Divorce or separation
> Death of a primary wage earner
> Relocation for work
> Rising living expenses that outpace income
> It should be honest, concise, and fact-based—not overly emotional or defensive.
Consumer Finance has a guide
How to Structure a Strong Hardship Letter
Here’s a basic structure to follow:
> Introduction
State your name, property address, and loan number. Clearly say you're requesting a short sale due to financial hardship.
> Explanation of the Hardship
Be clear and specific. Mention what changed in your life that impacted your ability to pay.
> Financial Impact
Briefly explain how the hardship has affected your income or budget. You can reference supporting documents like pay stubs, medical bills, or bank statements.
> Efforts to Resolve
Let them know you’ve tried to stay afloat—cutting costs, seeking work, modifying the loan, etc.—but it’s no longer sustainable.
> Request for Short Sale
Politely ask for their approval of a short sale to avoid foreclosure, protect your credit further, and resolve the loan responsibly.
> Closing
Thank them for their time and consideration.
What to Avoid Saying in Your Hardship Letter
Your lender isn’t looking for blame, anger, or long-winded explanations. Here’s what to leave out:
> “I deserve forgiveness”
This isn’t about what’s fair—it’s about what’s factual.
> Blaming the bank or others
Keep it focused on your situation, not finger-pointing.
> Over-sharing or too much emotion
The story should be compelling but professional.
> Promises you can’t keep
Avoid saying things like “I’ll pay it all back eventually” if that’s unlikely.
Final Tips
> Keep it under one page
> Use simple language
> Have someone else proofread it
> Include documentation to back up your story
If you’re not sure where to start, we can help. Our team works with homeowners every day to craft hardship letters that strike the right tone and meet lender requirements.
You can learn more about the full process on our Short Sale Stages page.
