#3 The seller must submit a letter of hardship that explains why the seller can not pay the difference due upon sale, including why the seller has or will stop making the monthly payments.  Examples of hardship are: unemployment, divorce, medical emergency / sudden illness, bankruptcy, and death.

The hardship letter is the beginning of the financial documents process in a short sale package. The items you attach to that letter will ultimately have a great deal of influence on the decision of the lender about whether to approve a short sale or not, and for the amount of the offer they'll accept.

Whether you're the borrower, a real estate agent, or an investor trying to purchase the home in a short sale, everyone involved should be concerned about providing all the documentation that will sway the decision of the lender.

•        Financial statements

•        Pay stubs

•        Bank statements

•        Hospital bills

•        Divorce decrees

•        Credit reports

•        Tax returns

It's a game of adding up numbers to show that the borrower is in an impossible situation leading to foreclosure or bankruptcy. It's the opposite of the process to get a loan. Then you're trying to prove you don't need it and that you're prosperous. Now the goal is to prove a hopeless payment situation.