Short Sales and Credit Scores
A short sale is when the lender agrees for the property to be sold at a price lower than the mortgage balance owed.
A deed-in-lieu is when the lender receives the house deed in place of the mortgage balance, although in some cases the lender will still pursue the homeowner for the leftover mortgage balance, which is called a deficiency judgment.
“In the case of foreclosures, for example, a person who had a solid credit score before her[his] housing nightmare could see it fall more than 15 percent under the system used by VantageScore, a scoring mechanism involving the nation’s three main credit bureaus, Experian, TransUnion, and Equifax.
Even if the person had paid all bills on time before, future lenders would see [him]her as a subprime borrower, which would make obtaining loans difficult.”
-- Sunday, June 27, 2010. “Personal Finance: Housing crisis likely to taint credit scores.” Gail Marks Jarvis, Philadelphia Inquirer
Fannie Mae, a government supported enterprise, backs a large percentage of U.S. mortgage loans, and your lender or I can find out if this is the case for your situation. After a short sale, you will be eligible for a Fannie Mae-backed loan in just two years, as opposed to five years after a foreclosure.
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Categories: Certified Distressesd Property Experts in Virginia, Virginia Short Sales, Foreclosures, Certified Distressed Property Experts in Virginia, Housing and the Economy, Housing Market
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