A short sale is all about helping people who have had hardship’; not the wealthy who want to reallocate their loss. Short sales can be done on investor owned property as well as owner occupied property. But, there has to be a financial reason why the owner cannot pay the rest of what is owed to the bank.
The way you express that is in the hardship letter. Some seminars give you a list of hardships, but do not limit your thinking to a simple list. Anything that causes a change in the financial condition from when the loan was taken out which results in the inability to pay the monthly payments and the impossibility of bringing the rest of the money owed to the closing of the sale is a financial hardship.
The owner should write it personally, with enough detail that the loss mitigation negotiator can feel the pain. The letter needs to describe what has happened to create the financial setback. You need explain why, in vivid detail, so that a hardened loss mitigation negotiator who reads these letters all day long can feel sympathetic to your client.
Do not stop with the description of the problem. Explain what you have done to try to eliminate the problem, deal with it, or make it better. You do not want the negotiator to just see that your client has fallen down, you want to describe the efforts to get back up again.
At the end of the letter, tell the negotiator that the owner wants to sell the house so that they can pay back as much of the debt as possible. The hardship letter has to be signed by the seller, and preferably by both sellers.
This should be on top of the short sale package, setting the stage for why this owner deserves to be allowed to pay less than what is owed to the bank. It is probably the most important document in the entire package, so give it the attention it deserves.
For a more detailed discussion on this topic, please go to http://shortsalesr.us/short-sale-dos-and-donts/do-a-compelling-hardship-letter/