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

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

FYI, my short sale has not yet closed so I am very glad I made the last payment before a 30 day late was reported.  I had to sign an amended document but it appears that was one of the last conditions for the buyers lender (BoA) to draw loan documents.  The close should be within the next few days. 

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)
Community Leader
Senior Contributor
StartingOver10
Posts: 4,581
Registered: ‎03-06-2010
0

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


UplandCitizen wrote:

I don't think the chart is cummulative.  For, example if you have a 780 and get a 30 day late it goes to approximately 680.  If you have a 780 and have  short sale without any lates is goes to approx. 660. 

 

However, if you have a 780 and then have a 30 day late it goes approximately 680.  Then if you have a short sale, you start at the 680 range and it goes down approximately 620. 

 

The affect would be that if you do not have any late payment before a short sale (with a start of 780), you essentially have a score of 660 which I believe immediately qualifies for an FHA loan. 

 

Am I right?


The score would qualify you but the short sale would disqualify you for many lenders if you are buying in the same area where your short sale home is located. Lenders have their own overlay over the FHA criteria. The guidelines say that you can get another mortgage with no waiting period if you had zero lates on your mortgage for the property you sold sold plus zero lates on all of your other consumer lates. But then the criteria states: "as long as the borrower is not taking advantage of market conditions". 

 

That is a pretty broad statement that lets the lender set their own rules. It would be one thing if you were transferred to another area due to your job or had some other event that forced your sale. But how would you show that you aren't taking advantage of market conditions if you sold your place voluntarily and then immediately purchased in the area something else? BTW, I don't know the answer to the question, I'm just bringing it up if you go for an immediate purchase in the same area after your short sale. I do applaud the fact that you are keeping your payments on time. I think its admirable  and I really hope you find a lender that will issue you a loan right after your short sale closes without waiting a year or even three years.

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

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

Oh Jeez, there always seems to be one more thing! My house didn't appraise high enough so I had to go back to Chase for re-approval. Was really hoping to close before December 1st, but with Veteran's Day and Thanksgiving, it's going to be tight! My Equity Line (2nd) payment is due tomorrow. Do you know if it's reported 30 days late a month from tomorrow (December 10), or would it be reported on December 31st?

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

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


esg wrote:

Oh Jeez, there always seems to be one more thing! My house didn't appraise high enough so I had to go back to Chase for re-approval. Was really hoping to close before December 1st, but with Veteran's Day and Thanksgiving, it's going to be tight! My Equity Line (2nd) payment is due tomorrow. Do you know if it's reported 30 days late a month from tomorrow (December 10), or would it be reported on December 31st?


 

Sorry about the appraisal, you may want to call to check when they report a 30 day late.  Normally, it's 30 days from the original due date. 

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.

[ Edited ]

StartingOver10 wrote:

UplandCitizen wrote:

I don't think the chart is cummulative.  For, example if you have a 780 and get a 30 day late it goes to approximately 680.  If you have a 780 and have  short sale without any lates is goes to approx. 660. 

 

However, if you have a 780 and then have a 30 day late it goes approximately 680.  Then if you have a short sale, you start at the 680 range and it goes down approximately 620. 

 

The affect would be that if you do not have any late payment before a short sale (with a start of 780), you essentially have a score of 660 which I believe immediately qualifies for an FHA loan. 

 

Am I right?


The score would qualify you but the short sale would disqualify you for many lenders if you are buying in the same area where your short sale home is located. Lenders have their own overlay over the FHA criteria. The guidelines say that you can get another mortgage with no waiting period if you had zero lates on your mortgage for the property you sold sold plus zero lates on all of your other consumer lates. But then the criteria states: "as long as the borrower is not taking advantage of market conditions". 

 

That is a pretty broad statement that lets the lender set their own rules. It would be one thing if you were transferred to another area due to your job or had some other event that forced your sale. But how would you show that you aren't taking advantage of market conditions if you sold your place voluntarily and then immediately purchased in the area something else? BTW, I don't know the answer to the question, I'm just bringing it up if you go for an immediate purchase in the same area after your short sale. I do applaud the fact that you are keeping your payments on time. I think its admirable  and I really hope you find a lender that will issue you a loan right after your short sale closes without waiting a year or even three years.


Thanks for your insight, and I agree that there may be issues regarding purchasing in the same area.  In our situation, we are short selling because my wife is no longer working, and even though I make a good living, our house is still too expensive for my income plus supporting a family.  I'm hoping  the mere fact they approved the short sale, because of a hardship, would be strong evidence that we are not taking advantage of the market conditions.  If we decide to buy something else, it probably would be smaller and more affordable then our current house.

 

However, the reality is, we are not going to buy the next day, perhaps next year and obviously something much cheaper and likely smaller than where we lived.  However, I am continuing to make my payments because I want to have the option to buy again, sooner than later.  I also want to minimize the affect of the short sale on my credit and because I am very responsible.   

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.

[ Edited ]

Just want to let you know that my short sale was completed around 11/20/12, so I avoided any 30 day lates.  The only affect on my credit will be the short sale.  As of today, my scores through myfico are EQ: 805 & TU: 811.   We will see what happens.  I will create my on post with my story for other to see.

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.

Congrats on closing your short sale! Mine is supposed to close this week. An update on the impact would be great. Thanks.

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 ]

I saw another poster that just had his/her short sale reported.  It took 77 days and his/her score went from 762 to 686.  So, this poster score only went down 76 points, incredible. 

 

 

"jmorleyk wrote:

It reported to credit agencies 77 days after the closing date.

 

Credit was 762, now is 686. It was reported as "Account paid for less than full balance"


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.

Although I signed closing docs on Monday, the buyer's lender is taking their SWEET time, so...looks like I won't close this month afterall. Likely next week, meaning I will miss one mortgage payment which is a super-bummer, but I just don't have the $2000 to make the payment. I guess we'll have to do a comparison on a short sale with no lates vs. a short sale with one 30-day late. My first late on anything ever! Honestly this process has beaten me down so much, I am ok with whatever happens. Since I am not planning on buying another home right away anyway, I will just work on re-building my score over the next few years.

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

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


esg wrote:

Although I signed closing docs on Monday, the buyer's lender is taking their SWEET time, so...looks like I won't close this month afterall. Likely next week, meaning I will miss one mortgage payment which is a super-bummer, but I just don't have the $2000 to make the payment. I guess we'll have to do a comparison on a short sale with no lates vs. a short sale with one 30-day late. My first late on anything ever! Honestly this process has beaten me down so much, I am ok with whatever happens. Since I am not planning on buying another home right away anyway, I will just work on re-building my score over the next few years.


I'm so sorry about the delayed closing.  If you remember I had the same problem with the buyer's lender taking his sweet time.  They were over 1 month late in closing compared to the estimate of a 45 day close and this was already after the bank agreed to the sale.  I had to pay a mortgage for a house I wasn't living in and rent, but luckily I had the resources to do it.  If it would go anther month, I would not have the resources and would have had a 30 day late. 

 

Once again, I'm sorry this has happened to you since you were so close.

 

 

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)

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}