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The news is out for October 2012, and once again Florida ranks number one in foreclosures in the United States according to RealtyTrac research.  It seems that one in every 312 housing units in Florida was hit with a foreclosure filing in October 2012.  That’s two times higher than the national average using RealtyTrac data; from RealtyTrac:

A total of 28,783 Florida properties had a foreclosure filing in October, up 2 percent from the previous month and a 12-month high, but the October 2012 total was still 13 percent below the October 2011 total.

Let’s consider what is happening in our local area by looking at  They are reporting the following related to these South Florida communities (Trulia reporting for week ending November 7, 2012):


Miramar has 1835 foreclosures, 714 homes for sale.


Hallandale has 65 foreclosures, 25 homes for sale.

Hollywood, Florida

Hollywood has 332 foreclosures, 1693 homes for sale.

Pembroke Pines

Pembroke Pines has 1591 foreclosures, 923 homes for sale.


Davie has 680 foreclosures, 754 homes for sale.

Fort Lauderdale

Fort Lauderdale has 5741 foreclosures, 3280 homes for sale.


Miami has 25,756 foreclosures, 9052 homes for sale.

Larry Tolchinsky’s Tip:

All this data is reporting information that most of us already know:  there are lots of foreclosures out there in South Florida and we’re not out of this housing crisis mess and Florida real estate is still reeling from the consequences of all the robosigning, appraisal fraud, etc. that has happened in the past few years.  Everyone involved in the real estate industry understands that things are bad and lots of real estate professionals are working hard to get things moving again.

Which brings us to hardship letters that home owners and borrowers write to their banks and mortgage lenders as part of their short sale strategy.

Banks will need to know why a home owner who borrowed money for a home loan can no longer make those payments before they will agree to a short sale and a “hardship letter” is where the home owner begins his negotiations on getting the lender to agree to short selling of the property that supports the loan.

Writing a letter doesn’t seem to be that difficult, right?  However, it is very important that this writing be clear and that it cover all necessary items for the seller’s best position in dealing with the lender in future negotiations.  Hardship letters go into the bank’s file.

Hardship letters are writings that bank attorneys will use against the person that wrote the letter if it helps the bank to do so.  Remember, the bank no matter how helpful it seems is NOT ON YOUR SIDE; the lender is adversarial to you.

Hardship Letters Are Potential Evidence and Should Be Respected As Important Legal Documentation

Enter the web sites with suggestions on what to put in these hardship letters.  It is very concerning to see real estate agents and real estate brokers, under the guise of being helpful in getting short sale deals done, offering web pages with detailed advice on what should go into a short sale financial hardship letter.  You can find these non-lawyers even offering up suggestions about what should go into a hardship letter, paragraph by paragraph.

Non-lawyers are advising on hardship letters and yet these hardship letters are filled with legal ramifications.  Whatever is written in the hardship letter from the borrower to the lender can be used against the borrower later, and not in a good way.

First, the language of the hardship letter can be used to try and nix any short sale by suggesting that the hardship letter isn’t accurate.

“Why didn’t you tell us that you owned a houseboat?”  “What about the child support, why didn’t you list that?”  “Have you really been hunting for a job?  You’ve got nothing to support a job hunt like you’ve described in the hardship letter.”

Second, the hardship letter can be used to delay things.

“Please supply details on how you have used credit cards to pay your mortgage.”

“We need more backup documentation on your job loss and transfer.”

Third, your hardship letter should never give away your authority to negotiate to an non-lawyer.

If you sign a hardship letter and direct your bank to contact your real estate agent or broker for questions, then will that language be used in the future to suggest that you gave away your authority to negotiate to someone else?  Especially to a non-lawyer like a real estate salesperson (no matter how long in the business)?

Hardship letters contain language that is key to the seller’s position in all negotiations with the lender.  It needs to be carefully written and vetted with documentation that supports its claims.  Different banks in South Florida may need different things.  Different hardships may require different strategies to get the bank to agree to the short sale.

Given the current economic conditions of our local South Florida foreclosure economy, it’s wise to avoid taking counsel from non-lawyers however well-intentioned and gain the advise of a Florida short sale lawyer when writing hardship letters to support a short sale.  Lawyers representing home owners in places like Davie, Fort Lauderdale, Miramar, Hollywood, Hallandale, and Pembroke Pines have experience in working with lenders here in getting short sales done.  And most South Florida short sale lawyers, like our law firm, offer financial packages that reflect the financial needs of our clients (for example, we never charge for the initial consultation visit).

Are there short sales that aren’t getting done because of people avoiding Florida lawyers and relying on these non-lawyer alternatives?  You betcha.  And don’t expect the bank to suggest that a home owner would be better off getting their own attorney.  That’s not gonna happen.

A good piece of advice is to at least speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.


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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.


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