What Qualifies as a Short Sale Hardship?
Sellers aren’t entitled to a short sale just because they’ve lost equity in their home. Lenders look for other hardships when approving short sale transactions.
- Job loss
- Death of spouse
- Natural disasters
However, besides a hardship, lenders also consider whether the home’s value has dropped, the mortgage is near or in default (you don’t have to default to qualify but you must prove that if something isn’t done soon, you will default, Udy notes), and the seller has no other assets.
What doesn’t qualify as a hardship? Udy says:
- Bad purchase decision or over-bought on the home
- Unhappy with location
- Purchased another home
- Walk away
- Home value declined