Upside down Florida property owners may be able to obtain a short sale from their lender by submitting a hardship letter and other required documentation in support of their hardship. You should contact your lender’s short sale or loss mitigation department first, and let them know about your hardship and your intentions. Also find out if they have a short sale package or a checklist of items that they will need in order to approve your short sale. Keep in mind that in order to get your short sale approved, your lender must approve the purchase and sale contract between you and your buyer.
Short Sale Package
Most lenders require the following information be included in the short sale package:
- Hardship letter.
- Authorization letter authorizing third parties to represent you. You can list your attorney, Realtor or short sale company representative. Be sure to include all necessary contact information for your representative(s).
- Your last two paycheck stubs.
- Copies of your last two year’s income tax returns.
- Financial statement.
- Bank statements.
- 1099’s or W-2’s.
- Listing Agreement with your real estate broker, if applicable. Your lender has to approve the agreement.
- Copy of the fully executed purchase and sale agreement between you and your buyer.
What to Include in Your Hardship Letter?
Writing an effective hardship letter in support of your short sale takes some skill and practice. The best advice is to hire an attorney to help you. However, if you decide to attempt the task on your own, you should include the following information in your letter:
- Names, addresses and contact information for all borrowers
- Nature of your hardship. Be sure to attach supporting documentation
- Your loan number
- Address of the property
- Name of your authorized representative, and your representative's contact information
- Request that you want to participate in a short sale
- Any other information your lender requires
By including the proper information in your letter, you will avoid any additional delays in getting your lender to approve your short sale.
Government Help
A Florida borrower is eligible for the government’s HAFA program if they have been turned down for a mortgage modification under the government’s HAMP program, or if they are currently participating in the HAMP program and have been unemployed for at least three months. Both you and your lender must agree to participate in the HAFA program. Borrowers get a $3,000 incentive from the government to use towards relocating, and lenders get a $1,500 incentive to use towards administrative costs for closing the short sale transaction.
Hire a Florida Attorney
You should hire a Florida foreclosure defense attorney to help you negotiate a short sale with your lender. The short sale process is complicated, and you will have a better chance of getting your short sale approved if you are represented by an attorney.
