Real Estate Information Archive


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What hardship is acceptable for a lender?

by Team Cook

Below you will find a list of "hardships" that are frequently accepted by mortgage lenders:

  • Job loss, unemployment or significant income loss
  • Divorce or seperation
  • Excessive medical bills
  • Death of spouse
  • Military service
  • Adjustment in mortgage payment or unforseen increase in living expenses

Most mortgage companies or lenders require the hardship letter pursuant to a short sale. In the hardship letter, it is important to present the facts clearly, and above all else, be honest. The hardship letter must be able to prove the situation that caused you to fall behind on your payments and the excuse for falling behind must be legitimate and provable. A hardship is defined real and the mortgage company believes the loan is likely to become delinquent.

"With the economy the way it is, I lost my job and had other family crisis's going on at the same time. I spoke with Kevin about a Short Sale. He explained everything to me, and I decided to list it with them. To make a long story short, best decision I have made in many years! I was able to concentrate on my family issues while they handled the sale of my home. One less concern for me."  Randy

If you are facing a hardship, and would like more information on the Short Sale process, call Team Cook - we ARE Certified Distressed Property Experts! 970-532-2695


by Team Cook



What is a Short Sale?

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate agent's commission. A short sale is an alternative to foreclosure which may benefit both lender and borrower alike.


How do I know if a Short Sale on my property is right for me?

If you are faced with a hardship and are unable to meet your financial obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through the foreclosure process.


If I do a Short Sale, what do I have to pay to sell my home?

In most cases, you will pay literally no sales costs if your lender approves the Short Sale. The agent commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval.


How do I get started on the Short Sale process?

There are very specific categories that lenders consider "qualified hardships." A short sale can only take place if both your property and you qualify. You will need to make sure you are working with an experienced short-sale transaction management team.


What "hardship" is acceptable for a lender?

Below you will find a list of "hardships" that are frequently accepted by mortgage lenders:

Job loss, unemployment or significant income loss
Divorce or separation
Excessive medical bills
Death of spouse
Military service
Adjustment in mortgage payment or unforeseen increase in living expenses

Do my mortgage payments need to be delinquent?

Most lenders will turn down your request for a short sale if the seller is currently making the payments. The only time they will consider it a short sale, is when the seller's payments are delinquent.


I have two loans; can I still do a Short Sale transaction?

Yes. You will have to work with both lenders to put together a Short Sale transaction packet. Most sellers in this situation are usually successful at getting the two lenders to cooperate because neither lender wants to own another home through foreclosure.


I am concerned about my credit - how will a Short Sale affect my credit?

Late payments leading up to a Short Sale will negatively impact your credit. However, if your bank accepts a Short Sale and does not negatively report, the short sale will not in itself negatively impact your credit score. For sellers, the key advantage to selling in a short sale is avoiding foreclosure. A short sale does less damage to a person's credit report than a foreclosure. It's also less detrimental than a "deed in lieu" (of foreclosure), in which a borrower gives the lender the keys to the house and stops paying the loan.


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Contact Information

Team Cook Real Estate Services
The Cottage Realty Ltd.
908 Mountain Avenue
Berthoud CO 80513
Fax: 970-532-2699

"I have truly heard and seen first-hand that Cottage Realty is wonderful, exemplary, and a real asset to the economy of Northern Colorado. I will definitely keep Cottage Realty in mind as my first choice if and when I have real estate needs in the future. Again, thank you so much. I will also refer you to friends and family who need your services. Sincerely...Stacy"