What Is An Acceptable Hardship?

There must be a hardship that is preventing the owner from being able to pay their mortgage.  Examples include:

    * Loss of job
    * Business failure
    * Damage to property
    * Death of a spouse
    * Death of family members
    * Severe illness
    * Divorce
    * Mandatory job relocation,
    * Medical bills
    * Military service
    * Payment increase or Mortgage adjustment
    * Insurance or tax increase
    * Reduced income
    * Separation
    * Too much debt
    * Incarceration


What is the Insolvency Requirement to Qualify for a Short Sale?

The owner must not be able to pay down their mortgage.  To qualify for a short sale, the homeowner must be financially insolvent.  This means that they owe more than they have or that they do not have liquid cash or assets that could be used to buy-down their mortgage.

If the owner does have liquid cash or assets they will be expected to use them to pay down their mortgage.  There could be a scenario where an owner made a contribution towards the sale of the property and the lender covers the shortfall.

A short sale is not a way to get out of a mortgage.  It is a tool for a borrower to use when they truly can’t pay their mortgage.