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by Sherri on May 14th, 2009
A bad credit report is something a lot of people are living with and the negatives can be explained away in this economy. I'd be more concerned with the consequences on my tax return as a short just may create an additional bill that can't be paid!
by Jose_Thomson on May 14th, 2009
The effect of a short sale (providing the sellers are more than 59 days late) on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status, which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.
by cinnamngrl on March 29th, 2009
A short sale is a real estate transaction and it shouldn't be listed on your credit report. However there is no reason for bank to accept a short sale unless you are about to default on your loan.
In a short sale the bank accepts the amount of money that you can get for the house although it is less then you owe. This will resolve the mortgage with the bank and you don't owe anymore money.
Since the bank loses money on this, it is a last resort for them. Unless the loan is already in foreclosure status, they probably won't consider it. Foreclosure and late payments are listed on your credit report so it that sense it is consistent with have negative information on your credit but not directly related. It also takes many months for the bank to follow through with the sale, and during that time the homeowner may have trouble paying.
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Comments
Thanks Sherri, supposedly that can be part of the negotiations and the 1099 not issued by the banks. It is something I am watching very closely, so it is a major concern. Thanks for your thoughts.
by Smile loves California on May 14th, 2009