Affect On Credit Of Seller When Doing A Short Sale

Sometimes, I think we gloss over the negative affects of a Short Sale. Deficiency Judgments and 1099 Reporting - notwithstanding, I think its important to give potential short sale prospects accurate information about how the process will affect their credit.



1) Late Payments While Waiting for Approval:

Most Lenders will report any late payments to the three national credit bureaus, which cannot be removed (if you were indeed late).



2) Default Notices - if it has gotten to or gets to that Point, any default notices, will remain on the credit report for a period of time (any one know how long?)



3) The Short Sale on The Credit Report

The way Lenders normally report the completion of a Short Sale is that they will report that the mortgage was "paid less than owed", "pre-foreclosure short sale", or sometimes "zero balance". Each company reports their own way, so it is hard to tell upfront what it will say.

Comments(1)

  • bargain764th February, 2006

    Methinks you worry too much.
    [addsig]

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