Financial Hardship That Can Qualify You For A Short Sale
If you are facing foreclosure in Pennsylvania, a Short Sale might be a solution for you.
What might be a qualifying cause of financial distress for a short sale?
- Loss of Job: When someone loses employment the financial distress is most often immediate and can seem insurmountable.
- Business Failure: For small business owners, the devastation of a business failure often goes hand-in-hand with the inability to meet personal financial obligations and the loss of their home.
- Damage to Property: Insurance coverage is frequently inadequate to cover the full amount of damage to a property and homeowners are unable to make repairs. Some homeowners have to use insurance funds to survive and find new living arrangements.
- Death of a Spouse: Needless to say, the death of a spouse is devastating to a family and all to often there is no or too little life insurance to replace lost income.
- Death of a Family Member: Even if the family member is not an income earner, the unexpected expenses incurred as well as possible lost wages from those financially responsible for the property can cause financial distress.
- Severe Illness: Medical bills and lost productivity can be financially devastating to a homeowner.
- Inheritance: Rarely does someone think of an inheritance as a means for distress however heirs are left to pay mortgage bills, utilities and maintenance that they did not expect. Properties even with significant equity can be in danger of being lost to foreclosure if a solution is not developed.
- Divorce: It goes without saying that divorce is one of the most common reasons for financial distress in the real estate market.
- Relocation: Many times relocation is a job necessity and not a choice of the homeowner.
- Military Service: Except for the relief provided in very specific situations by the Servicemembers Civil Relief Act (SCRA), military service can lead to reduced income, additional expenses and financial distress.
- Mortgage Payment Increase: The easy availability of mortgages in recent years has come with unforseen results for many borrowers. Even though many know a rate adjustment is imminent, they are unprepared for the true impact on their finances.
- Insurance or Tax Increase: For many homeowners a property tax increase or a hike in an insurance premium can cause a family to lose a home.
- Reduced Income: Often a changing economy can bring reduced income to commissioned or self employed individuals.
- Separation: Even without divorcing, the cost of maintaining two households can cause the loss of the primary residence.
- Too much debt: For people with credit card debt, even minor increases in their interest rates can make the difference between paying all their bills and missing payments.
- Incarceration: Yes, this is a hardship, most often for those left to deal with the household bills.
Documenting your hardship starts with the “Hardship Letter“. You should also have as much back-up as possible, including medical bills, credit card, loan, tax or insurance statements, etc.