Readers Respond: How Has a Short Sale Affected Your Credit?

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}

Short Sale Nightmare/vs. Foreclosure

in 2/09 i put my apt up for a reg. sale. I was listed with MLS w/realest for over 3 yrs with people coming to see apt&offers that disap. & dropped price almost 100,000 and still no buyers in 10/11 i started a short sale because i was running out of money & never thought it would still be listed 3yrs later with a 100,000 drop in price.I was running out of money & turned down by Chase for every type of loan mod because of no work even though i paid my mortg on time w/great credit score. I started a short sale 10/11 & to date i finally got a buyer & I rec a foreclosure notice from Chase 30 days after being late on mortg even though i started the process of a short sale, & being in constant contact with them, i found out last week they were foreclosing on the apt next month. How can this be?even though i am doing a short sale?+my credit score went from 780 in 10/11 to 580 on 4/12. 200 pts?im current w/bills for now,but cred card pymts doubled & crdt limits lowrd & APRS 25% Horrible situat

—Guest Anonymous

Question

Has anyone had a problem after a short sale or foreclosure of the banks coming after them for money?

—Guest Question

Credit score

I couldn't be worry about credit score. I am happy that shortsale went into closing. I was 15 months late on payment. I paid off credit cards, cars. No debt except rent and utilities. Credit score can be salvage later. Don't get stuck on Fico. If I can't pay cash, I don' buy.

—Guest Ph

Short sale ruins lives

My wife and I had to move because of lay offs and job relocations. The day we listed our home we had never missed a payment of any kind whats so ever. Two months later we found buyers and submitted a short sale to Chase and Citibank for the 2nd. Still making the payments we were denied a short sale from Chase and Citibank. My realtor told us if we missed a few paymets the banks would grant the short sale. We stopped making payments and still had the same buyers wanting the home (cash offer). IT TOOK THE BANKS 10 MONTHS to decide and process eveything!! We were now in default 10 months... That was August 2010. Fast forward to January 2012 and our cridit scores initally dropped by 100 points and are now at 740-760+. the only late payments were to both loan companies, all others paid. We both have well paying jobs and have been told we will have to wait the standard 3 years to even be considered for a loan. Renting is our only option, good by american dream!

—Guest short seller

Credit score ok

We short sold our house in November of 2009. A year later I checked my credit score and it was still 650. I then checked it last month (2 years later) and my credit score had risen to 715. This was with my wife and I not paying our mortgage for over 7 months.

—Guest garc1068

Very good article about credit score

read this the credit scrore points part is very interesting

—Guest Morgan

BofA suggested Short Sale Mod Denial

In November 2010 advised by BofA after exhausting all efforts since October 2009 to utilize affordable alternatives to retain home ownership, that we should consider a short sale. We were in the mod plan, out of the mod plan, received letter of intent to forclose one day and told to continue paying the mod plan amount the next. Never spoke to anyone who had a clue and was shuffled between offices in Texas, Ohio, Tenn, Fla, AZ,NY etc. and faxed more than 150 pages of documentaion. We finally closed the short sale last month after BofA totally botched the process. Now they tell me it will take up to 90 days to report this information to the 3 credit companies. So they ask for info,give you short deadlines, immediately report your delinquences to the 3 credit companies, (they closed all my credit accounts) but when you are trying to get a rental, utilities, etc. you have to wait for an additional 3 months before they report the short sale completion. Contributed 8k to sale. Nightmare!!!

—Guest ski

50k under water with sick kid

Wife and I refi'd in 2006 and made $25k in home improvements pending a new family. Went chapter-7 in 2008 due to sick child. Never been late on my mortgages and applied for HAMP/Making Homes Affordable due to my sick 4yo son (he has been diagnosed with a disease and we have been overwhelmed with medical costs). DENIED modification because we make too much $ yet we still live paycheck to paycheck. Now we're going to try a shortsale or strategic default. The banks only care about the bottom line even if your kid is sick and you're broke.

—Guest delta8tyeight

No problems

Lost job, but stayed current with savings, help, etc. Finally got decent job offer but 800 miles away. Moved and put house on market and stayed current. No offers. dropped price. no offers. Friend and RE agent said i should try to short sale. Stopped making payments. offer within 2 weeks. jumped thru all the hoops with the bank. bank approved SS about a month later and closed last week. No issues. don't know how it will affect Credit score and don't really care. ONLY debt was the house. Credit score was in 800's.

—Guest ShortSaleFan

Lost about 150 points so far....

We purchased a home in 2005...We were never late until 2009. In 2008, our property flooded and we were told that there were environmentally protected wetlands on the property. Not having this on our survey or title, I sought a title claim. The property value dropped out of sight...I was then asked to transfer and requested modification, re-fi, anything to keep the home and rent until we could sell....Modification papers sent in more than 10 times, kept telling us we had an 'incomplete application", would not consider as long as mortgage was current....short sale with promissory note to p and I insurance is now the offer...waiting on closing...I agree with previous post....bloodsucking banks suck, they got 70,000 from me, got paid off by p and I for settlement that will not be revealed to me...I have had to pay 35,000 to get it short sold and my credit is ruined...Still positive and know that God will provide and take care of us though...Florida

—Roger009

Short sale credit pains...

We saw the storm, called the bank, asked for help..Good standings-call us when you are in F/C. We asked for a F/C packet and sent a letter of why..Nothing for 3 months. House was on market, called realitor to short sale. he said stay in house. Credit was great, we decided to move and find a place before credit went bad. Kept paying bills but not on house. 6 Month shortsale, same day Bank-wamu- Went out of business, we closed..Chase took over wamu..Said we owed them $$$...Not what wamu agreed too, nor contract..Still we are going on 3 years plus...Credit 680 with 3-Scores...BUT Bankers Mort..Stated that score is 100 points less on paper...And it is a 3 year from closing before it drops off..We have till sept 2011 to be able to buy again. Renting now, owner loves us...sucks that bank did not care about us when we needed them. That is wrong. Someone should change this..I can't get a mortgage even if I wanted to until my 3 years is up...Rediculous...Banks ALL suck...So much for Stimulus...

—V6I2P

Credit Score Still Dropping

We did a short sale with WF who would not consider the buyer's offer because we were not deliquent on our loan. We went delinquent, and then the holder of the HELOC started stalling. By the time the 2nd finally agreed to the sale, we were over 120 days late. The 2nd demanded a huge contribution of $30,000 to close which we paid, just to try and get out from under water. Late payments sunk our credit about 100 points. Now the 2nd has submitted new info to the credit bureaus saying our HELOC balance is a charge-off and sent to collection. Our score will drop even more because of this.

—Guest Jan

Not What Realtor Promised!!

When I lost my job 2 1/2 yrs ago I immediately contacted mortgage company. They advised that since I had never even been late on a payment, they couldn't help. They suggested if I stopped paying mortgage, they could. My realtor advised that if I sold my home in a short sale, it would drop off credit report within18 months and would only impact score 100 points. I listed, sold and closed on the 93rd day. I recent pulled my report and obtained my scores. Nothing else negative. My FICO score dropped from 780 to 598. The report said the mortgage was foreclosed. When I challenged the 3 agencies, it was explained that they have no designation for "short sale" I explained that no court filing were ever started and the mortgage company worked with us to close on the 93rd day. Fannie Mae rushed it through and excepted the first offer we received. The response from agencies...if 90 days or more late, its a foreclosure. Will remain on report 7 yrs.

—floridawayne

16 mos delinq-short sale

Credit score was 817 prior to ss....down to 568 after finally closing Nov 2010. The mortgage (first/second) were the only delinquencies.

—Guest Vince

short sale due to move for job

hi, i have a couple of questions for those of you who have gone through the process: 1) wondering if i don't stop making payment, how that's going to affect my credit (i'm assuming less negatively than if i did stop) 2) how difficult is it to get approved for a short sale under those circumstances? (my propperty is under water...) thanks in advance!

—Guest san diegan condo owner