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Member
esg
Posts: 21
Registered: ‎10-01-2012
0

2012 (current info) on the impact of a short sale without late payments.

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.

Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
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Re: 2012 (current info) on the impact of a short sale without late payments.

[ Edited ]

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.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
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UplandCitizen
Posts: 54
Registered: ‎10-18-2012
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Re: 2012 (current info) on the impact of a short sale without late payments.

[ Edited ]

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. 

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
Member
esg
Posts: 21
Registered: ‎10-01-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

Thanks for the input. My bank is Chase and when I called regarding making the October payment (they have already approved my short sale.) they said "we cannot advise you on wheher or not to make a payment." when I escalated it to a manager she said a payment would jeopardize the approval since a payment would cause all the numbers to change and force it all to be re-done. Of course I don't want to do this, but my escrow is not closing for 45 days do it looks like I will get the the 30 day late and the 60 day late now. Very frustrating!!!
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Elcid89
Posts: 567
Registered: ‎10-04-2012
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Re: 2012 (current info) on the impact of a short sale without late payments.

This is spelled out in FHA mortgagee letter 09-52

 

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

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jnkp2001
Posts: 135
Registered: ‎01-04-2012
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Re: 2012 (current info) on the impact of a short sale without late payments.


Elcid89 wrote:

This is spelled out in FHA mortgagee letter 09-52

 

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf 

 

 

 

   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.

FICO EQ: 633 8/15/12
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Valued Contributor
tooleman694
Posts: 2,297
Registered: ‎08-25-2011
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Re: 2012 (current info) on the impact of a short sale without late payments.

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.

New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

[ Edited ]

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.

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

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.

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

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.  :smileysad: 

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)

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