Why a short sale may be the solution?
Are you upside down on your mortgage?
If so, than a short sale could be the solution for you. In order to qualify for a short sale you must answer yes to one or more of the following questions:
- Has your income decreased?
- Did you or your spouse lost their job?
- Have you incurred medical expenses?
- Has there been a divorce?
- Have you had a job transfer?
- Is there an illness that prevents you or your spouse from working?
Note: The short sale will be based on the person(s) who are on the note, not the deed.
How does a short sale affect your credit score?
Once the short sale transaction closes, the sellers credit report will be affected.
A short sale will be reflected on the Seller’s credit report. The report will show the number of days late on the mortgage, (30, 60, 90). When the sale is complete it should be reflected on the credit report, as “account settled for less than full balance”, and the account will usually show PAID and CLOSED.
The Bank could reserve the right to pursue the Seller for the balance at a later time (a deficiency).
- Effective Nov. 1, 2012, Fannie Mae and Freddie Mac will issue explicit deficiency waivers at time of closing.
- Policy prior to this announcement, the GSE’s have reserved the right to seek deficiency judgments, but claim they do not have any intention of pursuing deficiency judgments.
It is said that having a short sale is much better to have on your credit report than a foreclosure and also takes less time to clear from your credit report than a foreclosure.