Writing A Hardship Letter For Short Sale

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If you have to short sell your property as a way to avoid foreclosure, your realtor may want you to write a hardship letter for short sale. Short sales are real estate transactions in which the amount paid for selling the property is less than the amount still owed on it and this is provided as payment to the lender. In order to have an acceptable short sale, the lender must be wiling to receive less money than the outstanding debt. Since there are costs for proceeding with the foreclosure, the lender may be willing to accept a lower amount.

Basics of Writing a Hardship Letter for Short Sale

The letter is a personal one that you write to your lender. It should explain why you have missed payments and what financial difficulties you currently undergoing. This is a normal part of the overall process. You will usually also have to include bank statements, financial statements, salary stubs, and tax returns. Additionally, you will have to evidence the hardship, which means you have no control over the situation you are in.

The letter itself should be as short as possible, without missing out any important information. There are templates that you can follow, but they should be seen as a guideline only, not something you can simply copy and paste.

Your letter should explain your situation and provide evidence of your hardship. It should also include details on why it is in the interest of the lender to accept a short sale. That it is in your best interest is clear, so you do not need to focus on that. Rather, you have to sell the short sale to the lender.

Explaining Your Hardship

Some hardships are quite commonly accepted. They include military service, natural disasters, interest rate resets, medical expenses, separation or divorce, loss of job, involuntary reduction of hours, or job transfer. Other reasons may also be accepted.

Make sure to include:

  • Your contact details, including account number
  • Photocopies evidencing the changes in your financial situation
  • Photocopies of all your bills
  • Proof of efforts you have made to reduce your expenses and/or increase your income.

Remember that you are asking your lender for a favor. Thus, there is no guarantee that your request will be granted. Hence, do not indicate or imply that the lender can be blamed for your situation. You should also not make any promises that you cannot keep. Additionally, you should not talk about the possibility of getting money from non-traditional sources, such as borrowing from your parents. Because that isn’t regulated, the lender will not be able to count on it. Finally, you should not use the letter to write a lengthy emotional account of how your hardship situation has affected you. That is common sense and it does not provide any new information on your ability or inability to meet your financial obligations.

A final thing to remember is that this is a formal letter. That means that you have to write it properly, without any spelling or grammar mistakes. You should also proofread it, or ask someone to do it for you. Send it via registered post and keep photocopies of the letter and attached documentation as well.

Hardship Letter For Short Sale Example

{Your Name}
{Your Address}
{Your Phone Number}

{Date}

RE: short sale request for my home at {address}

To Whom It May Concern:

My name is {Name}, and I currently reside at {address}, a house that I bought on {date of purchase}. At the time, {mortgage company} provided me with a {30-year, 15-year, etc.} mortgage of {amount in dollars}, with a {fixed/variable} interest rate.

When I purchased the home, I was perfectly capable of making the mortgage payments on time and in full. Since {date}, however, I have been struggling to make the payments because of {details of why you have fallen behind on payments; be specific}.

Currently, my monthly income is {amount in dollars}, which must go to {medical payments, childcare costs, etc.}, leaving an amount that will not satisfy my mortgage payment.

I have found a buyer who will purchase my home for {amount in dollars}, which is the best offer I have found since putting the home on the market in {month}. I am hoping you will accept this offer so that we can both avoid the hassle and cost of a foreclosure.

I would also appreciate it if we could work out a plan that doesn’t require you to make a negative report on my credit.

I have enclosed the relevant financial paperwork that will help to illustrate my current situation, including {explanation of the paperwork you’re including}.

I am truly sorry that I have ended up in this situation, and I hope that my plan for this short sale will make it so that we can all move on as quickly and smoothly as possible.

Sincerely,

{Sender Name}

Writing A Hardship Letter For Health Care Exemption

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Health care insurance companies regularly change their policies and procedures. They also frequently change their prices, which is something that they are contractually allowed to do. With the new Trump Administration causing some doubt over the continuation of the Affordable Care Act, many insurance companies have started to change their polices and prices, which can cause significant difficulties, including hardship, for many people. If this is the case with you, you may be able to write a letter to your insurance company to allow an exemption.

How to Write a Hardship Letter for Health Care Exemption

The letter to your health insurance company is a formal letter and should be written as such. This means that you should proofread it properly so that it does not contain any grammar or spelling errors. You should address it properly and to the right person, and you should date it. The subject line should also indicate what you are writing about, as well as your policy number.

Starting the Letter

Start your letter by explaining that you would like an exemption from the latest policy change. Indicate when the change is due to take effect, and that you would prefer to remain on the plan that you are currently on. Indicate that should the new plan be imposed on you, it will cause significant hardship for you and your family.

Content of the Hardship Letter

State the amount you currently pay and how often you pay it, while also stating your deductible and your copay. Then explain how this would change under the new plan. It is likely that at least one of the three elements – the monthly coverage, the deductible, or the copay – will rise significantly although it is usually all of them for there to be real hardship. Indicate that your alternative would be to move to a cheaper plan, but this would mean you have less coverage but you need the coverage for your family.

Make it clear that in most cases, employees save a significant amount of money by not accessing their employer’s health insurance. However, this may not be the case for your family. Indicate how much you earn each year before tax, as well as how much others in your family make, and show that there is no company insurance to rely on. If this is the case, you may find that you are under the income cutoff for a family of your size, and that this means that under the State Exchange of the Affordable Care Act, you do not qualify for tax credits or subsidies. Explain that you would then have a higher copay and that you would not receive dental or vision coverage, if that is the case.

Essentially, you must make it clear that you wish to stay with the insurance company that currently covers you, because you appreciate what they offer, but that you will not be able to do so if they change their policy. Provide evidence from quotations you have received from other insurance companies and from your employer’s coverage if applicable.

Hardship Letter For Health Care Exemption Example

To Whom It May Concern:

I am writing to request an exemption from the new health care coverage that will go into effect on {date}. I would like to maintain my current plan, as the new one will be detrimental to my family and cause extreme financial hardship.

The old coverage cost us {amount} per month for a(n) {amount} deductible and a(n) {amount} copay. The new health care plan would require us to pay {amount} per month for a(n) {amount} deductible, which will cost me {amount} more per month for less coverage.

While I understand that in many cases, not having access to employer health insurance will result in savings costs for employees, this is definitely not the case for our family. While I earn approximately {income} annually in gross wages, my {husband/wife} makes {amount} per year with no company insurance, which puts our {number}-person family over the income cutoff to qualify for subsidies/tax credits under the Affordable Care Act’s State Exchange. We would also be receiving no vision or dental as well as a higher copay. It’s a big step down from the generous, affordable policy we’ve enjoyed through {Company Name}. We got quotes from a local insurance agent and they were just as difficult for our financial situation.

It is vital that we retain our current coverage. Not only does our family have ongoing health care needs, we have been counting on the {aspect} in order to provide {care} for our children. I have attached a copy of our {year} tax return as well as pay stubs and a copy of our recent health care costs. Thank you for your consideration.

Sincerely,

{Sender}

Writing A Waiver Of Penalty Letter

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A waiver of penalty letter is a formal request in writing to waive a penalty that has been imposed on you. For instance, you may be given a citation, a penalty fee, or a new financial obligation. If you feel that such is undeserved, or if you feel that it would unfairly affect you, then you can ask for it to be waived. That said, there is no guarantee that the issuing agency will give in to your request, but it never hurts to ask.

It is very important, however, that your waiver of penalty letter is formal. Exactly what should be included in the letter will vary depending on what type of penalty you are facing. That said, the entity that you are dealing with will likely have certain terms and conditions that will determine whether or not you are eligible to have your penalty waived. Hence, before you begin writing your letter, you have to make sure that you have looked into the different terms and conditions, thereby making sure whether or not you qualify.

How to Write a Waiver of Penalty Letter

You should always start your letter formally, explaining first why you are making such a request. You must make sure that the entity to whom you are writing to understands exactly which fees you are referring to, and whether you are requesting a full waiver or perhaps any other form of modification to the imposed penalty.

You should also provide any supporting information that you have, in as much detail as possible. List dates, places, people involved, costs incurred, venues, and so on. Do not, however, exaggerate your assertions. Similarly, you should not be emotional. The entity you are writing to cares about facts, not about feelings.

When you are ready to send your letter, you must make sure that it includes any documented evidence that you may have. This includes copies of receipts, witness statements, email printouts, photographs, and anything else that you may have that supports your statement or request. Do also make sure that you keep your own copy of all of the documents and that you send the letter via registered post, and that you get a receipt as well.

Reasons to Write a Waiver of Penalty Letter

There are a number of situations in which you may want to write a waiver of penalty letter. These include the situation when:

  1. You want to have your bank charges waived.
  2. You have been denied a visa due to a criminal history and have incurred a penalty for this. You may then also want to write a letter appealing the decision itself.
  3. You have been hunting and have been told that you did not do so in the legally accepted manner.
  4. You paid a bill late, such as a credit card bill, and incurred a late payment fee.

The above are just four examples of situations in which you may want to write such a letter. Essentially, in any situation where you may have to pay a penalty, you could write one. However, do be aware that there is no guarantee that your penalty will actually be waived.

Waiver Of Penalty Letter Example

{Name}
{Address}
{Phone #}

{Date}

Dear {creditor}:

I am writing to request that you waive the penalty of {amount} on account number {number}. It’s true that I paid {number} days late, but there were extenuating circumstances.

For {number} years I have made monthly payments on this debt, without exception. I know the due date by heart and it is also marked on my calendar.

However, {on or around the most recent} due date, I suffered extreme hardship in the form of {accident/injury/death in the family/other emergency}. As you can imagine, my priorities instantly shifted. It wasn’t until {situation resolved} that I took a look at my missed bills and other responsibilities and realized that {creditor} was among them.

I promptly resumed payments at that time, but it was too late to avoid being assessed the late fee. I’m also concerned that this will cause my interest rate to rise, or that it will otherwise affect my good credit.

Please consider reversing the fee in light of these unusual, one-time circumstances. I wish to remain in good standing with your {company/agency}.

Appreciatively,

{Sender Name}

Writing A Hardship Letter For Rental Property

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If you own an income property and it is still under a mortgage, there are certain situations in which you may find yourself incapable of paying the amortization. If this situation is beyond your control, which means you are experiencing true hardship, it may be possible for you to avoid foreclosure on the property by appealing to the goodwill of your lender. To do this, you have to write a properly formulated letter.

Tips in Writing a Hardship Letter for Rental Property

A hardship letter is a formal letter and must be treated as such. Address it properly, make sure it is proofread, and send it via registered mail. Keep copies for yourself so that you have a paper trail of your correspondence. Show that you are willing to come to an arrangement and there is a chance that your lender will feel the same way.

Start your letter by explaining that you are aware that you have not been making the necessary payments on your property, and that you hope to remedy that by being able to come to a mutually satisfactory arrangement. State that you wish to avoid foreclosure, but that you are currently experiencing financial hardship. It is very important that you are specific about the nature of your hardship, and that you include documented evidence for it. Examples of acceptable hardship include:

  1. Loss of employment or involuntary reduction in hours and income
  2. Death in the family
  3. Medical bills
  4. Sudden illness or disability
  5. Incarceration
  6. Separation or divorce

What to Include in the Hardship Letter for Rental Property

Explain that the money that you currently have as an income has to cover a number of bills. Include copies of all your bills, such as for medication, home mortgage, car payments, and food. Make it clear that you have worked hard at reducing your expenses by giving up on life’s luxuries, and that you have tried to increase your income, for instance, by taking on a part time job. However, despite these efforts, you still find yourself in a situation that makes it impossible to keep up with your payments for the rental property.

State that the property in question is one that provides you with rental income. Indicate when you rented out the property and for what monthly amount. If you don’t have tenants in the property or if there are a lot of vacancies, remember to mention that. If tenants are present and they pay their rent on time, explain why this still is not sufficient for you to keep up with the payments.

Suggest a Mutually Acceptable Solution

You must then provide a solution that you believe to be acceptable for you and the lender for the payment of arrears. State whether it is your desire to keep the property, or whether you would be happy with selling it, perhaps through a short sale. If you want to keep your property, make an offer of reduced payments, showing an amount and specifying for how long you would be doing that. Do not promise an amount that you really cannot afford in your current situation. Also, offer a repayment plan for the shortfall when you finally get back on track, again only offering to pay what you expect your future finances will allow.

Hardship Letter For Rental Property Example

{Your Name}
{Your Address}
{Your Phone #}
{Your Loan #}

{Date}

To Whom It May Concern:

I am writing this letter to explain the reasons why I have been unable to pay my mortgage payments on the property at {address}, and to inquire as to what I can do to avoid foreclosure on my property.

My income has become significantly reduced recently, due to {sickness, death in the family, job loss, etc. BE SPECIFIC}. The money I have remaining every month must go to {food, car payment, mortgage on home, medication, etc.}. I have done everything in my power to keep up with the payments, but it unfortunately has become impossible {or will become impossible as of a certain date}.

I have been using this property as a rental income property for {length of time}, and I {do/do not} currently have tenant(s). {If you have tenants, indicate the amount they pay in rent each month, and why this is still not sufficient to keep you up to date on the mortgage} .

I believe I can resolve my debt by {your solution to “working out” the debt, or a request that they provide the solution}.

Please understand that I know I signed a contract and that I am responsible for these payments, but there is also only so much I can do with the little money I currently have.

It is my intention to keep this property if I can, so I hope we can work out a solution as quickly as possible.

Thank you,

{Sender Name}