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Defining Your Hardship

iStock_000006605323_SmallIf you are a homeowner struggling to make your mortgage payment, there are several options available to you.  One of those options is what is known as a Short Sale.

Quite simply, a Short Sale is a sale in Real Estate that does not satisfy all lien holders.  In other words, when your home is worth less than what you owe to your mortgage lender(s) and/or other lien holders, you cannot sell it and satisfy those lien holders; you will come up “short.”

A Short Sale is when the lien holders, understanding that your home is underwater, allow you to sell the home for less than what you owe them.  But simply being underwater, or having loss of home equity, does not qualify you for a Short Sale.  You must be able to prove that you have a hardship that makes paying the mortgage difficult or impossible.

There are many types of hardships that make paying your mortgage difficult, and they are not all financial.  Below are some of the most common types of hardships that may qualify homeowners for a Short Sale:

  • Loss of income, including unemployment (temporary or permanent), underemployment or reduction of rental income in a multi-family home
  • Illness/Medical Emergencies, including out of pocket medical expenditures and associated inability to earn wages
  • Increased Expenses, including increases in property taxes, utilities, living expenses, insurance and cost of living
  • Increase in Mortgage Payments, including resets of interest rates and expiration of adjustable rate loans
  • Marital problems, including divorce and separation
  • Death or disability of a borrower

There are other hardships, unique to a borrower’s situation, which can also qualify a homeowner for a Short Sale.  The best way to determine if your hardship will meet the required threshold for a Short Sale is to contact a Short Sale expert in your area to discuss your specific situation.