Short Sales Affect Credit

Bottom line is that divorce is not a legitimate reason for short sale or loan. away after a short sale, but usually the credit damage is to severe to do so for.. We submitted a letter with the short sale package to that effect, which.

Short sales may still show up on a credit report as a "pre-foreclosure in redemption" status. Although this can result in a credit score reduction of 100 points or less, a foreclosure will usually reduce your score by more than 250 points.

A short sale is less damaging to a homeowner’s credit score than a foreclosure. Credit bureau reports are limited in their reporting and foreclosures are represented as such while short sales are represented as settled accounts.

My credit was about 800 and then we missed 2 payments during short sale process. 2 missed payments + the short sale resulted in my credit score at 630. But it listed the 3 credit agencies and two of them listed 630 and the other 710.

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Credit Score Damage from Short Sales. A short sale is where you sell your home to a third party for less than what you owe on the mortgage. The financial institution holding your mortgage must agree to the short sale first because they are writing off the difference between what you owe on the mortgage and the proceeds from the short sale.

A short sale does not have to affect your credit score and yo don’ have to be delinquent to complete a short sale. I have negotiated 3 short sales where no adverse action was taken by the banks.

A short sale will not appear as a foreclosure on your credit report, and therefore only the previous delinquency on your mortgage will appear. Also, I believe that most mortgage lenders report a mortgage that is paid through a short sale as being in a redemption status.

Short sales and deeds in lieu: FICO, the most popular credit scoring model in the United States, conducted a study of the impact of foreclosures, short sales and deeds in lieu on credit scores. It found that short sales and deeds in lieu affect credit scores as negatively as foreclosures.

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