Knoxville Short Sales Question: What Do Lenders Define As Hardship?

creditcardsIn our Ask the Expert Section, we recently received a question from Jimmy, he asks, "I'm in a tough situation. My wife stayed home after having our first child, and shortly after that, I had my wages cut. I've been able to keep paying my mortgage, but things have been tight. Our child has had some health problems which have caused us to have some high medical bills as well. I'm afraid of losing our home to foreclosure, and have thought about doing a short sale on our Knoxville home. I've read that lenders require "legitimate hardship" to approve a short sale. What exactly do lenders define hardship as?"

Lenders do not take approving Knoxville short sales lightly. If they are going to accept less than is owed on a home, they want to see that a short sale is last resort to avoid foreclosure. This is why you will hear lenders require "legitimate hardship" to approve a Knoxville short sale.

Lenders are willing to accept a wide-variety of reasons for hardship. Acceptable forms of hardship include: job loss, loss of income, illness, disability, relocation, military service, divorce, incarceration, increased monthly mortgage payments (ARM or interest only mortgages), or an increase in your monthly bills (from medical bills, etc.).

The hardship you endured can be proven to your lender with the help of financial records and a hardship letter. In your hardship letter, you will explain how you got into your current situation, what you did to make paying your mortgage possible, and how you're in a permanent situation which makes paying your mortgage difficult.

Are you facing foreclosure on your Knoxville home? Do you want to hear your options to avoid foreclosure? If so, please do not hesitate to give my team a call at 865-696-9002 or send an email to [email protected]. We’ve helped countless Knoxville homeowners avoid foreclosure. Give us a call today for a free consultation.

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