10-01-2012 01:35 PM
I have searched the forum, but can't seem to get any current information on short sales. Short sales in 2012 are being considered now by the banks without being behind. I am in the process of a short sale due to a divorce and my ex losing his job. I am not late on my payments and expect the sale to close in about 60 days. I have read that it's really the late payments that affect your score more than the short sale itself. My realtor said not to bother making the payments that it is "bank propaganda" that they put out to get more money. My feeling is this is not true. I really want to minimize the negative impact on my score. If they report a "settled as agreed" without showing delinquency, what will be the impact? Trying to find the truth so I can decide weather to scrape up money for payments. Thanks.
10-01-2012 01:42 PM - edited 10-01-2012 01:48 PM
The damage comes from them reported "settled for less than full balance", as opposed to "paid as agreed". You'll face a waiting period (3 years I believe for FHA) to get another mortgage, because short sales are treated the same as foreclosure for mortgage underwriting. And with a short sale in your past you'll be "thoroughly" studied by underwriting. So if you can swing remaining current that will help you if you want to get underwritten for another mortgage any time soon.
10-18-2012 04:51 PM - edited 10-18-2012 04:52 PM
I've am selling my house via short sale. I have made all payments except October's payment because the sale is suppose to be completed soon. BofA advised that they only report a late payment after 30 days of being late and since the short sale will be done before the 30 days, I will close without any 30 day lates. I will let you know how this affects my credit, but this could be a couple months from now.
As for FHA loans, it is my understanding that as long as you do not have an 30 days lates prior to a short sale, you would be eligible to obtain an FHA mortgage as long as the property is smaller than your original property.
10-18-2012 06:31 PM
10-18-2012 07:06 PM
This is spelled out in FHA mortgagee letter 09-52
10-18-2012 09:57 PM
This is spelled out in FHA mortgagee letter 09-52
I would say, if it gets close to the 30 day late mark, to pay. According to the HUD letter. When in doubt, conventional wisdom would say it is always better to pay then not to pay.
10-18-2012 10:25 PM
I would think a short sell would hurt a lot more then the lates. Late or not I would think your credit would be close to the same score.
10-22-2012 09:51 AM - edited 10-22-2012 09:52 AM
Agreed, the short sale will hurt, but from what I read, lates combined with a short sale hurts a lot more. Plus, under the FHA guidelines, you may be eligibile to purchase a smaller property right away.
10-22-2012 09:53 AM
Agreed, if it gets close, I will pay the mortgage because I do not want a 30 day late. FYI, this is also a HAFA short sale.
10-25-2012 11:58 AM
The closing was extended to October 31, 2012 and the Buyer lender BoA have not submitted final loan docs as of 10/25/12. Looks like I will have to pay October's mortgage payment inorder to avoid a 30 day late mark since I doubt it will be funded by 10/30 with a weekend in between.
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