Posted on: 21st Jan, 2010 09:33 am
Hi,
I stumbled on this site as I was googling information about my shortsale. There seems to be some very knowlegable people on here and I hope someone can help me.
My husband and I did a short-sale on our home almost 1 year ago. Since then, I have been monitoring his credit (it was in his name). His score plumeted from a 750 before the shortsale down to 530. Since that time, I have canceled all but one credit card and with the exception of student loans (aprox. 20,000 that are in defferrment), he has no debt. As of this month his score has climbed to 658. I don't think that I will see anymore radical changes in it in the next year (when we would like to buy again) since all the debt is paid off and we will not be tackling those student loans... I just don't see how it will increase.
My question on the short sale is three fold:
1. On the credit report, it states "charge-off", not short sale or anything. We recieved a forbarance from our lender, who suggested the short sale to us in the first place, so we were never behind in any payments. This is what it looks like on his report. The legend (wouldn't let me copy) is current and then hits 30 days (when we got behind) late then is left blank for 3 months until our shortsale where in black is says c/o (charge off).
Closed (Paid) Closed (Paid)
Balance: $0
Type: Conventional real estate mortgage
Pay Status: Collection/Chargeoff Current
Now I know how negatively charge offs can hurt your credit, but we were in agreement with the bank that they would not come after us for the differnce of what we owed and what it sold for (almost 40,000 difference). I'm assuming that is why it says paid but the charge-off confuses me and I'm wondering when we can buy a house again and how this will affect us.
2. We were told that we wouldn't have any tax implications from this short sale, but I've been reading and it sounds so??? This is a link that my realtor sent me about no tax consequences
3. We want to be able to buy a house with a 6% interest rate and approx 5% down on the house (160000 house with 8000 down). When will we be able to do this?
I appreciate all answers! THANKS!
I stumbled on this site as I was googling information about my shortsale. There seems to be some very knowlegable people on here and I hope someone can help me.
My husband and I did a short-sale on our home almost 1 year ago. Since then, I have been monitoring his credit (it was in his name). His score plumeted from a 750 before the shortsale down to 530. Since that time, I have canceled all but one credit card and with the exception of student loans (aprox. 20,000 that are in defferrment), he has no debt. As of this month his score has climbed to 658. I don't think that I will see anymore radical changes in it in the next year (when we would like to buy again) since all the debt is paid off and we will not be tackling those student loans... I just don't see how it will increase.
My question on the short sale is three fold:
1. On the credit report, it states "charge-off", not short sale or anything. We recieved a forbarance from our lender, who suggested the short sale to us in the first place, so we were never behind in any payments. This is what it looks like on his report. The legend (wouldn't let me copy) is current and then hits 30 days (when we got behind) late then is left blank for 3 months until our shortsale where in black is says c/o (charge off).
Closed (Paid) Closed (Paid)
Balance: $0
Type: Conventional real estate mortgage
Pay Status: Collection/Chargeoff Current
Now I know how negatively charge offs can hurt your credit, but we were in agreement with the bank that they would not come after us for the differnce of what we owed and what it sold for (almost 40,000 difference). I'm assuming that is why it says paid but the charge-off confuses me and I'm wondering when we can buy a house again and how this will affect us.
2. We were told that we wouldn't have any tax implications from this short sale, but I've been reading and it sounds so??? This is a link that my realtor sent me about no tax consequences
3. We want to be able to buy a house with a 6% interest rate and approx 5% down on the house (160000 house with 8000 down). When will we be able to do this?
I appreciate all answers! THANKS!
You should first check out with your lender whether or not they short sold the property or send the account to collections. If they had short sold the property, then it would not have been mentioned as charge off. If the lender has wrongly reported the account, then ask him to rectify it. After a short sale, you won't be able to get a loan immediately. You'll have to wait for 2-3 years in order to get a loan.
If the lender has charged off your mortgage, then you will have to contact the collection agency and start making the payments. If you do not do so, then the collection agency may sue you for the debts.
If the lender has charged off your mortgage, then you will have to contact the collection agency and start making the payments. If you do not do so, then the collection agency may sue you for the debts.
but if a lender lost $40000 in the short sale transaction, then that lender must charge off that loss - it's an accounting entry. in many cases, depending on locale, the lender also has the right to collect on that loss. reporting to credit bureaus that an account has been charged off doesn't seem to be contrary to the law, to me.
