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Niicss
Joined: 03 Oct 2005
Posts: 4772
Location: New Jersey
499.62 Dollars($)
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A deed in lieu of foreclosure will have a negative affect on your credit report. It will lower your score by 250 points and will remain on your credit report for 7 years. However, you won't be liable for the deficient amount which results from the sale of the property. In case of a short sale, though you would be liable for the balance amount, your score will be lowered by 80-100 points. If you can afford to pay the deficient balance, then it's a better option to go for a short sale.
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Good is the Enemy of Great. |
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cads73
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Post subject: Short sale questions |
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Ok, first off: I have no credit card debts currently. The only debts I have are a student loan and a mortgage. I want to do a short sale for my house for the following reasons:
1. I owe over 50,000 on my mortgage than what the actual value is. I have absolutely no equity. By the way, I have two lenders. One is for the main lender, the other is for the second mortgage (the down payment if you will).
2. The state I live in (Michigan), it has a high unemployment rate. I am one of the unemployed. So that means my unemployment will run out soon. I have been keeping up with payments, but once unemployment runs out, no more payments.
3. I have job prospects and opportunities out of state. The house I have is keeping me from becoming economically viable.
4. I have about 10,000 saved up. I don't want to burn through that since that would be foolish. I also have some retirement which I don’t want to “borrow” from it, because that would mean penalties and taxes. Since my state has such bad unemployment, I don’t know when I will be able to “pay back” my retirement.
I want to know, can I actually do a short sale? Do I have to provide a hardship letter to the relater (or to the lender)?
I also heard that through the end of this year, if you do a short sale, the loss will not be considered income as long as the mortgage was not used for anything other than your house? Can you confirm this?
Should I cash out my savings so that the lenders’ can’t go after it?
Anything else you could tell me. |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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bobbibell76
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Post subject: help... |
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| Can I close on my house (short sale) without being 31 days behind on my mortgage..? |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Welcome back bobbibell,
Generally lenders will accept your short sale once you are delinquent on your mortgage payments. If you're current on your mortgage payments, the lender may not accept your request.
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Procrastination is the enemy of your financial success |
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Jeff GDP
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Post subject: Short Sell with good credit and lots of savings |
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| I owe 150 to the bank on a house purchased at 164 the tax appraisal on the home is 191. I can bring 20 thousand to close in cash. I am leaving to go back to Law School for 3 years in July. I have 815 credit score. I cannot get an offer on my home. Is it smarter for me to short sell than to spend my 20 thousand that I need for law school? Should I preserve my credit or will it rebound in 3 years. I have no intention of buying a home in the next 10 years. |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Andrew
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Post subject: Is it really a short sale |
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| My wife and I moved across country for work and currently rent a house. We could not sell our home and rented it out. We now want to sell it but it may not be worth the value of the mortgage. Is there any way to sell a home for less than the mortgage and pay off the balance of the loan through monthly payments and not affect our credit? My lendor, Chase, says that you can't pay off the value of the home if you sell it for less than the loan, but only do a short sale. Is this true? |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Welcome Andrew,
You can apply for a short sale with your lender. You'll be liable for paying off the deficient mortgage balance to the lender. You can negotiate with the lender for monthly payments. However, your credit score would get reduced by 80-100 points.
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Procrastination is the enemy of your financial success |
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Andrew
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| Thanks for the info. So if I pay off the remainder at the closing would it still be classified a short sale and affect our credit? |
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smithsussane
Joined: 18 Sep 2008
Posts: 10045
Location: Alaska
921.83 Dollars($)
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Hi Andrew!
Welcome back to forums!
Though you pay the deficient balance at the closing, as far as I know, it will still be considered as a short sale and have a negative affect on your credit.
Feel free to ask if you've further queries.
Sussane |
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tommy
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Post subject: My credit score after a shortsale? |
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| If my it score is 822 and i lose 100 points after a shortsale, Will my credit report damage my chances of using a va loan soon there after? |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Hi tommy,
Immediately after a short sale, you won't be able to get a VA loan. Though you've a good credit score, yet you'll have to wait for 2-3 years in order to qualify for a VA loan.
_________________
Procrastination is the enemy of your financial success |
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anonymous5
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Post subject: short sale shows as foreclosure in the credit report |
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| Dear sir/madam.I recently did a short sale on my home after I stop the payment for about 14 months.the bank(chase)agreed to do the short sale,but they did not mention anything on closing that I don't owe anything(The deficiency).how can I clear my credit report, saying that I did a short sale,not a foreclosure.is there a chance they can come after me for the deficiency amount?kindly help. |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Hi anonymous,
In case of a short sale, the lender can after you for the deficient balance. You would be responsible for paying off the balance dues. As far as your credit report is concerned, it is your lender who should report it as a short sale and not as foreclosure. If your lender has reported it as foreclosure, you should contact the lender and request him to rectify it.
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Procrastination is the enemy of your financial success |
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