#1 If you have had a foreclosure or short sale you need to have your credit run by a lender before you start shopping.
When I say lender I mean someone who will actually read your credit report, not just look at the score. Â This is critical.HERE IS WHY:
As the market evolves we are staring to see a lot of buyers that had either a short sale or foreclosure in their past. Â Unfortunately, even though these buyers are meeting the time frame for buying a home after a short sale or foreclosure their credit is making it impossible. Â Why you ask? Â low score? Â No Â
Some banks are not updating the credit to show that the foreclosure has occured and is over, same with short sales.
Â The credit reports instead of reflecting the foreclosure closed 3 years ago are saying things like "foreclosures proceedings started" with a balance and a payment amount. Â This is a HUGE problem.
Â As a lender we need to see that mortgage liability no longer is due and when the foreclosure occurred. Â We can look up when the foreclosure occurred but if ZZZ bank is telling the credit bureaus you still owe them money we have an issue. Â We are seeing this with 2nd mortgages on foreclosures and short sales too. Â There is no activity but account is open with balances. Â As one lender I cannot say another bank is lying and give you a loan. Â I need your credit report to reflect what happened.
How to fix it:
1) Get your credit run so you can see what it says asap. Â You can run it for free on my website
and I can review or you call another lender. Â This is a hard pull to your credit so don't have multiple people do it.
2) If it is reporting incorrectly call the credit bureaus and ask them what type of docuentation they will require to investigate the issue (generally proof of foreclosure and short sale)
3) Send documentation to bureaus. Â There response will take 30 days. Â Generally they will clean it up but if not that means that the bank is saying you still owe them money and at that point you need a lawyer.
Below is a song that I feel the banks are singing when they mess up your credit like this and you don't catch it