Posted on: 29th Dec, 2005 11:49am
A Short sale is where the lender agrees to accept an offer for a house that is less than the amount owed on the mortgage. Short sales happen when the owner is behind or about to become behind on their mortgage and want to avoid foreclosure. Moreover, if the home is located in an area where home prices are on a decline, then it may be sold off for less at a price that isn't enough to cover the loan balance.
A short sale is less damaging to your credit score than a foreclosure. Your FICO score will drop by 75-100 points if you do a short sale, compared to 250 if you get a deed-in-lieu.
By attempting a short sale, the borrower can avoid foreclosure and a decrease on their credit score. Moreover, a short sale may be faster and less expensive compared to foreclosure.
A short sale is less damaging to your credit score than a foreclosure. Your FICO score will drop by 75-100 points if you do a short sale, compared to 250 if you get a deed-in-lieu.
By attempting a short sale, the borrower can avoid foreclosure and a decrease on their credit score. Moreover, a short sale may be faster and less expensive compared to foreclosure.
How to negotiate for short sale..
In most cases, borrowers are approved for the sale only after they have been in default and the lender has served them with a Notice of Default. At times, the borrower has the option to negotiate a short sale in case he's unable to pay off the loan and intends to move out. In this case, the borrower should provide the lender with a hardship letter stating why he cannot continue to pay his mortgage and why a short sale is the best option for both parties. It's better to take help of a real estate agent or attorney to negotiate a pre-foreclosure sale with the lender's Loss Mitigation Department.
My credit score is 550 and I am selling a house. I owe 50k and I am looking to do a short sale for 45k should. How does short sale affect credit score.
Hello I want to rent my property but I spoke to a realtor and she suggests that I do a shortsale. I know that if I rent my place I will not get enough monthly to cover the mortgage. The realtor claims that my credit will not be affected by a shortsale. Is there a certain amount of time for a shortsale property to be sold before the property becomes a foreclosure?
for you to try a short sale, you'll have to gain the consent of your lender. this, of course, would take you off their foreclosure roster at least temporarily.
i don't know where your realtor got his or her information, but the short sale will definitely have an adverse impact on your credit. in thi marketplace, that seems less important than simply eliminating the debt of that mortgage.
i don't know where your realtor got his or her information, but the short sale will definitely have an adverse impact on your credit. in thi marketplace, that seems less important than simply eliminating the debt of that mortgage.
According to the new regulations laid down by the Federal Treasury last Monday, short sales are now included under MHA. The fed will now give both borrowers and lenders cash incentives for successful short sales, and if you're in danger of foreclosure and cant get a loan modification, you should really explore this avenue. There is still a credit score hit with a SS, but its a lot better than the one you will take with a foreclosure.
If I had a short sale and the lender forgave the remaining balance, what will be the specific affects on my credit score? Because of deterioting market conditions, the property had no choice but to be a short sale.
A short sale will reduce your credit score by 75-100 points. This is irrespective of whether or not you pay the deficient balance to the lender.
My home loan has a balance of $397,000 and homes in my neighborhood are short selling or foreclosing between $200,000-$250,000. Mine is a bit nicer and a BPO of $265,000 was received so my buyer offered $285,000 to get sale done. Credit Union accepted but private mtg insurance co. declined. Why would they do this and what can I do? Note: the buyer is my father and the credit union knows this and does not care if a family member purchases.
the mi company stands to lose a fair bit of money if that sale goes through. that's apparently good enough reason for them to decline. do they have knowledge of your father being the buyer? that might be too close for comfort for them as well.
We can't sell our house and have to move. We only owe $44,ooo on it. We dont want 2 payments every month. Rent isnt an option. What options are left?
you haven't indicated what the approximate value of home may be. that would certainly be important - dropping the price would seem to be a viable solution to the inability to sell at this time.
at $44000 you'd like to think that the payments wouldn't be prohibitively high, but of course, we don't know your budget, nor why renting it out is out of the question.
that leaves you with walking away and having your lender begin a foreclosure action, i guess. if all other options have been considered and discounted, that's seemingly all that's left.
if that's unacceptable, then you'll have to choose from the rest of the list, and take the one that is least inhibiting to your overall plans.
at $44000 you'd like to think that the payments wouldn't be prohibitively high, but of course, we don't know your budget, nor why renting it out is out of the question.
that leaves you with walking away and having your lender begin a foreclosure action, i guess. if all other options have been considered and discounted, that's seemingly all that's left.
if that's unacceptable, then you'll have to choose from the rest of the list, and take the one that is least inhibiting to your overall plans.
Would you short sell a home to a relative?
it's my experience that most lenders are prone to deny that opportunity, cherbear. it's "too close" for their comfort, i believe.
How do I improve my credit score after a short sale? I have very little debt and need to improve my score to buy a house.
Hi Memphis,
Do you have any negative items apart from the short sale on your credit report? If there's any collection, charge-off, etc., first try and remove them from your credit. It is good that you have little debt which you can easily manage. But you should have a few low balance credit cards, use them every now and then and pay them on time. This helps you improve credit score.
Do you have any negative items apart from the short sale on your credit report? If there's any collection, charge-off, etc., first try and remove them from your credit. It is good that you have little debt which you can easily manage. But you should have a few low balance credit cards, use them every now and then and pay them on time. This helps you improve credit score.
Am in the process of putting both of my properties in short sale, my question is the drop down in my FICO score will be double impacted or will be a one time drop down ?
Am in the process of putting both of my properties in short sale, my question is the drop down in my FICO score will be double impacted or will be a one time drop down ?