Short Sales

There are a lot of questions when it comes to short sales. The following is an email I received yesterday as an FYI from the North Oakland County Association of Realtors. It is from someone who has experienced a short sale and how it has affected them:

Hey guys, I thought you might be interested to learn how going through the short sale impacted our credit reports. You are welcome to share the general information, but please do not share our names, nor our personal details. Prior to the layoff, and the short sale process, we were at, or very near 800 rating. The last report we pulled was probably a year prior, when we purchased a camper, and it was around 795. In April, we were running 60 days late on payments (for 2 months running), and had 1-90 day late listed (we are challenging this, as we were never 90 days late, but that is what was listed). But EVERYTHING else was current and no payments were missed. The reports show concern over Amount owed on Delinquent Accounts, and Amount Past Due. Now we have the short sale listed, and the delinquent accounts closed (both GMAC and BOA are listed as: Closed, Settlement Accepted on this Account). They are showing 3-90 days late on the BOA account (we are going to challenge this).

Yes, that is right, our credit score actually went up slightly after the short sale. The middle score in April was 644, and in August 658. Overall, missing payments, and short selling the home cost us 140 pts on our report. We are pursuing financing for a new home in Knoxville, and the biggest issue is the 90 day lates. It seems the settlement can be worked around fairly easily by a knowledgeable mortgage broker. I would suggest that a short sale is a good method to get away from a large burden, but try to avoid 90 day lates if at all possible, 60 days does not seem to be a problem, but 90 is an issue. I am told that even with a 90 day late, we can get financed 12 months after the late occurred, through an FHA loan.

I hope that is helpful, just information. If you have questions on a short sale contact Adam (810) 733-3374