What qualifies as a short sale hardship?

WASHINGTON – Jan. 6, 2011 – Sellers aren’t entitled to a short sale simply because they’ve lost equity in their home. Lenders first look for other hardships when approving short sale transactions.

Lisa Udy, a real estate professional with Logan Real Estate in Utah, notes in a recent article that the following hardships often qualify: Job loss, illness, divorce, death of a spouse, natural disasters or bankruptcy

However, besides a hardship, lenders do at least consider whether the home’s value has dropped, whether the mortgage is near or in default, and whether the seller has other assets.

Short sale excuses that banks generally reject include: A bad purchase decision by the owner, unhappiness with the location, an owner who purchased yet another home, pregnancy, an owner who walked away, or dissatisfaction with a decline in home value.

Source: “Short Sale Hardships – Qualifying for a Short Sale,” Tempe Real Estate Agent (Jan. 4, 2011)

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