Short Sales

Here are some frequently asked questions regarding short sales, foreclosure and how they impact your credit score and credit report.

“Does a short sale hurt your credit?”

“Short sales take more than 90 days, how will that affect my credit score?” 

“ What kind of time frame should I expect for foreclosure on my credit ?”

“How does a foreclosure affect a persons credit score?”

“Can credit repair actually remove foreclosures from credit reports?

 ..so on and so forth. 

Well, let me lead off by saying that both a foreclosure and a short sale will have negative effects on your credit score  .  The deviation is that a foreclosure will be more detrimental to your overall credit and will remain longer on your credit report than a short sale. 

Short Sale: 

• 200-300 reduction to your FICO score depending on the borrower.
• Inability to obtain a standard mortgage for at least 24 months

Foreclosure

• 200-300 point reduction on your FICO score, depending on the borrower.  This is not a typo, the impact on your score is very close to what short sale would do .
• Remain on credit report for 7 years.  Inability to obtain a mortgage for at least 24 months.  Difficult to obtain a standard interest loan afterwards

The solution:

One of the major concerns that homeowners have when going through with(p) a short sale, foreclosure or even a BK are the consequences on their credit. 

However, what most homeowners  are completely unaware of  is that the FCRA (Fair Credit Reporting Act) requires certain documentation  by creditors before reporting an item on a credit report, and if a creditor misses one or more of these steps (which they often do), the FCRA will not allow the item to calculate on the credit report.  This includes unverifiable information, clerical errors, mistaken identities, etc. 

What this basically means is that you, as a homeowner, might be qualified to have your short sale, foreclosure, late payments (30/60/90 day lates) and sometimes even your BK removed from your credit report even if they are accurate.  This is not illegal!  In fact, it is actually the law that allows you to accomplish this, since the FCRA requires conditions beyond “accuracy” to be met by creditors when reporting a negative item on your credit report. 

If you are looking to buy another home post-short sale or foreclosure, don’t fall for one of those high interest “foreclosure loans for bad credit” provided by hard money lenders who are looking to take advantage of your situation.  Rather, remove negative items using our lawyers, raise your FICO score and obtain a standard, low interest mortgage when purchasing your next place.   

Credit Repair & Deletion:

 My goal is to assist clients with leaving their foreclosure situation  with as clean of a slate as imaginable.  With the help of one of our partner law firms, you can remove foreclosures from credit reports, as well as short sales and other negative items.  Deleting negative items on your credit is a sure fire way to help rebuild your credit after a short sale, foreclosure or even BK faster than you’ve ever thought possible.

—> Use this link to learn more about how to remove foreclosures from credit reports

When it comes to short sales and foreclosures, do what the experts tell you .  Don’t do what everybody else is doing , rather, take advantage of what’s out there and milk every chance you can find.  The reason why most homeowners are stuck having to short sale is because they ended up purchasing homes based on feelings or the opinions of a single realtor.  This time, choose differently.  Take advantage of our knowledge on the subject and you’ll be back running in no time.