I am hoping someone can help me out with this one and let me know how this may impact my ability to qualify for a mortgage. We had a short sale on our previous home which closed in June 2010. In order to close the sale we were required to sign a $10k note with Freddie Mac which was ultimately purchased by Dyck O'Neal. We are now in a position where we would like to purchase another home and are able to put 20% down, have ample income, stable employment, etc.
In order to help clean up our outstanding credit issues related to the short sale (or at least was my intent) I recently settled the remaining balance of the note with Dyck O'Neal. While I thought this was the right thing to do it has unfortunately left us with a derogatory remark of "settled for less than full balance" on our credit report and reduced our score from about 685 to 640. We have had no other derogatory remarks for over 1 year and I had thought we were finally in a great position to buy again but now I am worried this recent settlement with Dyck O'Neal may have backfired. Do any of the mortgage experts out there have any insight into whether this will create a challenge in obtaining a mortgage approval either due to the mark itself or the fact that it reduced our score below the imortant 680 mark. Is there anything I can do to quickly remedy this situation in the next month or two????
I appreciate your feedback!
Yes. The tradeline is reporting all payments up until the settlement as paid as agreed (approx 2 years worth of monthly payments). Hopefully this will help my cause. I am more concerned about the impact it has had to my Credit score and whether I will still be able to qualify based on a score in the 640 range. Anyone have any insight on this?