Comments on: Do a Short Sale or Foreclose? Either Way Your Credit is Shot and It’ll Be Hard To Get a Loan in the Future! http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/ Home Mortgage Expert in Phoenix, Arizona Wed, 19 Nov 2008 13:33:59 +0000 http://wordpress.org/?v=2.6.1 By: Dana http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2534 Dana Tue, 02 Sep 2008 22:22:53 +0000 http://www.azmortgageguru.com/?p=914#comment-2534 Do anyone know of a company that will allow me a home loan AI have at least a 640 credit score however I am understanding that because my short sal eI went through on a FHA loan that I cannot get approve for at leaset 2 years after my sort sale, is this true,,,di anyone know how long you have to wait before applying for a FHA loan, after a short sale on a FHA loan... Do anyone know of a company that will allow me a home loan AI have at least a 640 credit score however I am understanding that because my short sal eI went through on a FHA loan that I cannot get approve for at leaset 2 years after my sort sale, is this true,,,di anyone know how long you have to wait before applying for a FHA loan, after a short sale on a FHA loan…

]]> By: Dave Jackson http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2498 Dave Jackson Fri, 22 Aug 2008 00:48:47 +0000 http://www.azmortgageguru.com/?p=914#comment-2498 Make sure you understand the landlord tenant laws in your state and have your rental/lease agreements prepared by or reviewed by a good real estate attorney. If there has been a foreclosure, don’t pay rent to the old landlord. Rather, try to find out who now owns the building. Dave Make sure you understand the landlord tenant laws in your state and have your rental/lease agreements prepared by or reviewed by a good real estate attorney. If there has been a foreclosure, don’t pay rent to the old landlord. Rather, try to find out who now owns the building. Dave

]]> By: CD http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2429 CD Tue, 12 Aug 2008 01:40:04 +0000 http://www.azmortgageguru.com/?p=914#comment-2429 A partner and I have a note with a bank for a property purchased in the name of an LLC however the mortgage was prepared incorrectly making the mortgage invalid and the banks ability to take title if the property as collateral impossible. The bank has title lender insurance to compensate them for a title defect or loss. Is there an impact to our personal FICO score (since we signed the note personally) even if the LLC offers deed in lieu if foreclosure and the title insurer compensate the lender for a loss? Effectively we have a binding note with the bank and the lender has no collateral however in order to achieve a semi reasonable settlement they have to sue us as borrowers or agree to a settle through a combination of the LLC transferring title of the property to the bank and the insurance settlement. Does this seem correct? A partner and I have a note with a bank for a property purchased in the name of an LLC however the mortgage was prepared incorrectly making the mortgage invalid and the banks ability to take title if the property as collateral impossible. The bank has title lender insurance to compensate them for a title defect or loss. Is there an impact to our personal FICO score (since we signed the note personally) even if the LLC offers deed in lieu if foreclosure and the title insurer compensate the lender for a loss? Effectively we have a binding note with the bank and the lender has no collateral however in order to achieve a semi reasonable settlement they have to sue us as borrowers or agree to a settle through a combination of the LLC transferring title of the property to the bank and the insurance settlement. Does this seem correct?

]]> By: Shailesh Ghimire http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2399 Shailesh Ghimire Wed, 30 Jul 2008 03:35:15 +0000 http://www.azmortgageguru.com/?p=914#comment-2399 BViti, I am sorry if you felt the comments were derogatory - they really aren't meant to be that way. The original post was about the impact of short sales vs. foreclosure on a persons credit score and whether or not it made sense to do a short sale at all. I am sorry to hear of your situation. I hope everything works out for you and that your husband's health improves. Thanks for stopping by! BViti,

I am sorry if you felt the comments were derogatory - they really aren’t meant to be that way. The original post was about the impact of short sales vs. foreclosure on a persons credit score and whether or not it made sense to do a short sale at all.

I am sorry to hear of your situation. I hope everything works out for you and that your husband’s health improves.

Thanks for stopping by!

]]> By: BViti http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2397 BViti Wed, 30 Jul 2008 03:17:54 +0000 http://www.azmortgageguru.com/?p=914#comment-2397 I am in the process of getting an FHA Mortgage after a short sale in 1/2008. I think the comments above are too derogatory in view of the facts. Short sales occur (as in my situation) because of all the foreclosures in the area (property values fell dramatically and that impacted the comps and my husband had medical problems). Why don't the lenders and everyone else realize this is America 2008. Why should borrowers be punished when they have paid their mortgage on time for 19 years. I am in the process of getting an FHA Mortgage after a short sale in 1/2008. I think the
comments above are too derogatory in view of the facts. Short sales occur (as in my
situation) because of all the foreclosures in the area (property values fell dramatically and that impacted the comps and my husband had medical problems).

Why don’t the lenders and everyone else realize this is America 2008. Why should borrowers be punished when they have paid their mortgage on time for 19 years.

]]> By: Shailesh Ghimire http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2374 Shailesh Ghimire Mon, 21 Jul 2008 17:17:04 +0000 http://www.azmortgageguru.com/?p=914#comment-2374 Tom, Per Fannie rules a Foreclosure only impacts you 5 years. Not 7-10 years. Tom,

Per Fannie rules a Foreclosure only impacts you 5 years. Not 7-10 years.

]]> By: Dana http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2367 Dana Sun, 20 Jul 2008 14:08:48 +0000 http://www.azmortgageguru.com/?p=914#comment-2367 I did a short sale on my property back in 2007 which was backed up by FHA....now that I am reading these blogs I am hearing stories that FHA will not insure me for about 3 years, however, Lend America has qualify me for a home loan ask me to go out and find a property and I wil get a loan, should I be worried about this or be happy that I am able to get a loan and feel confident that it will be back by FHA again. I did a short sale on my property back in 2007 which was backed up by FHA….now that I am reading these blogs I am hearing stories that FHA will not insure me for about 3 years, however, Lend America has qualify me for a home loan ask me to go out and find a property and I wil get a loan, should I be worried about this or be happy that I am able to get a loan and feel confident that it will be back by FHA again.

]]> By: Dana http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2366 Dana Sun, 20 Jul 2008 14:04:44 +0000 http://www.azmortgageguru.com/?p=914#comment-2366 If I did a short sale on my property that was inusred by FHA, can I still qualify for a home loan, I found a lender that will give me a home loan "Lend America" will FHA back that home loan up. If I did a short sale on my property that was inusred by FHA, can I still qualify for a home loan, I found a lender that will give me a home loan “Lend America” will FHA back that home loan up.

]]> By: Tom Hinz http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2363 Tom Hinz Fri, 18 Jul 2008 12:36:27 +0000 http://www.azmortgageguru.com/?p=914#comment-2363 This article is very misleading. Short sales CAN be recovered from much easier than a foreclosure. Your facts are just not accurate. The bottom line is you will take a couple hundred point hit on your credit score with the short, and it will impact you for a good three years...which is a heck of a liot better that 7-10 years with foreclosure. However, the score can be brought back up within the 3 year time with some SMART secured short term financing. Anyone that doesn't understand these credit repair strategies is only giving one side of the coin. I know this to be fact because I did this very successfully with my first short sale back in 1994 and helped others with it since. This article is very misleading. Short sales CAN be recovered from much easier than a foreclosure. Your facts are just not accurate. The bottom line is you will take a couple hundred point hit on your credit score with the short, and it will impact you for a good three years…which is a heck of a liot better that 7-10 years with foreclosure. However, the score can be brought back up within the 3 year time with some SMART secured short term financing. Anyone that doesn’t understand these credit repair strategies is only giving one side of the coin.

I know this to be fact because I did this very successfully with my first short sale back in 1994 and helped others with it since.

]]> By: Gary Miljour http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2210 Gary Miljour Wed, 04 Jun 2008 05:01:23 +0000 http://www.azmortgageguru.com/?p=914#comment-2210 Your information on foreclosures is very accurate, but on short sales, it really just depends on the bank giving the new loan and that borrowers individual situation. I have to agree that I think a borrower who has gone through this situation needs to wait 2 years, but the banks are not making it a rule. Some banks have. For instance I know Countrywide and Wells Fargo are now requiring borrowers who have been through a short sale to wait 2 years. But that is not every bank making that rule. I also know that FHA has no hard rule on short sales. They are still using the rules based upon if the borrower has made rent or mortgage payments current with no lates for the last 12 months. If you have a short sale seller who then comes back to you 5 months after a short sale and kept that mortgage current, then they still meet FHA guidelines. It then just comes down to if the end bank will do the loan or not. I know currently some are and some are not. Your information on foreclosures is very accurate, but on short sales, it really just depends on the bank giving the new loan and that borrowers individual situation. I have to agree that I think a borrower who has gone through this situation needs to wait 2 years, but the banks are not making it a rule. Some banks have. For instance I know Countrywide and Wells Fargo are now requiring borrowers who have been through a short sale to wait 2 years. But that is not every bank making that rule. I also know that FHA has no hard rule on short sales. They are still using the rules based upon if the borrower has made rent or mortgage payments current with no lates for the last 12 months. If you have a short sale seller who then comes back to you 5 months after a short sale and kept that mortgage current, then they still meet FHA guidelines. It then just comes down to if the end bank will do the loan or not. I know currently some are and some are not.

]]> By: Shailesh Ghimire http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2208 Shailesh Ghimire Wed, 04 Jun 2008 04:04:24 +0000 http://www.azmortgageguru.com/?p=914#comment-2208 Christoph, From my experience I have had underwriters tell me that they treat short sales under the same guidelines as a foreclosures. Once there is any of these things are on your credit report, the score is pretty much meaningless. You could have a 680 or a 600 and because of your foreclosure or short sale you'll be treated the same. This is from a few underwriters, so I can't say how wide spread this interpretation is. You guys have raised some very good points. I'm going to do some digging on this topic and will report back with some hard core numbers and guideline rules. Stay tuned! Christoph,

From my experience I have had underwriters tell me that they treat short sales under the same guidelines as a foreclosures. Once there is any of these things are on your credit report, the score is pretty much meaningless. You could have a 680 or a 600 and because of your foreclosure or short sale you’ll be treated the same. This is from a few underwriters, so I can’t say how wide spread this interpretation is.

You guys have raised some very good points. I’m going to do some digging on this topic and will report back with some hard core numbers and guideline rules. Stay tuned!

]]> By: Steve Belt http://www.azmortgageguru.com/do-a-short-sale-or-foreclose-either-way-your-credit-is-shot-and-itll-be-hard-to-get-a-loan-in-the-future/#comment-2207 Steve Belt Tue, 03 Jun 2008 20:16:55 +0000 http://www.azmortgageguru.com/?p=914#comment-2207 Like Chris and Christoph, it is my understanding that while a short sale is going to absolutely kill your credit in the near term, particularly because approval almost requires the seller to stop paying their mortgage, and thus they get pegged with 30-, 60-, and 90- day lates, a short sale has a quicker time to credit recovery than does a foreclosure. This point isn't touched on, but until it gets discredited (all puns intended), that's why REALTORS should be advising their clients that a short sale, and all of the pain they entail, are better than foreclosures. Regarding how landlords view short sales, I can attest that 75% of the tenants I'm placing these days are going through some type of short sale or foreclosure process. As a property manager, we see these tenants as perfect for the rental property, because they've been home owners, and are likely to actually take better care of the property than your "typical" tenant. Often, tenant prospects in this category offer to voluntarily pay a bit extra to encourage the landlord to take them on...quite frankly they don't need to, but when someone volunteers to pay more, we happily let them. Like Chris and Christoph, it is my understanding that while a short sale is going to absolutely kill your credit in the near term, particularly because approval almost requires the seller to stop paying their mortgage, and thus they get pegged with 30-, 60-, and 90- day lates, a short sale has a quicker time to credit recovery than does a foreclosure. This point isn’t touched on, but until it gets discredited (all puns intended), that’s why REALTORS should be advising their clients that a short sale, and all of the pain they entail, are better than foreclosures.

Regarding how landlords view short sales, I can attest that 75% of the tenants I’m placing these days are going through some type of short sale or foreclosure process. As a property manager, we see these tenants as perfect for the rental property, because they’ve been home owners, and are likely to actually take better care of the property than your “typical” tenant. Often, tenant prospects in this category offer to voluntarily pay a bit extra to encourage the landlord to take them on…quite frankly they don’t need to, but when someone volunteers to pay more, we happily let them.

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