Frisbee, Home Seller in Historic District, D...

which is best on your credit rating---deed in lieu, foreclosure or short sale

Asked by Frisbee, Historic District, Dallas, TX Mon Nov 2, 2009

Help the community by answering this question:

Answers

16
Kelly Fest’s answer
Short sale would be better...but if it is just a lower payment that would help you out and you are upside down you can still refinance through the end of the year with the new HARP DU Refi Plus loans, then you can wait for the market to turn around and not have that hicki on your credit.
0 votes Thank Flag Link Thu May 3, 2012
Definitely short sale. It shows that you have a balance left on your mortgage amount, but not the entire amount like a foreclosure or deed in lieu. Much better to go short sale if you can...

Good luck!


Jackie
1 vote Thank Flag Link Mon Nov 2, 2009
Short Sales and Deed in Lieu of Foreclosure are basically the same process. The only difference is a Deed in Lieu of Foreclosure does not have a buyer.

Most lenders [or servicer] require that a homeowner attempt to sell the property for at least 90 days before considering a deed in lieu of foreclosure.

Deed in Lieu of Foreclosures have many advantages and disadvantages. They are complex and require careful planning. In an agreement with your lender [or servicer] a deed in lieu may have different language that they will report to the credit bureau. typically, lenders [and servicer] report "Settled for less than the full amount owed' other times, "deed transferred in lieu of foreclosure." Negotiation of credit language can help, but most lenders [and servicer] are unable to change the language in their agreements.

To learn more about your options, and to create customized plan to avoid foreclosure tailored to your individual situation, Delmarva Home Relief may be able to help. Delmarva Home Relief is a Regulated Mortgage Assistance Relief Service Provider located in Salisbury, Maryland.

Our team cuts through the red tape by explaining all of the alternatives to foreclosure from Loan Modifications, Short Sales, Deed in Lieu of Foreclosures, Foreclosure Mediation and assisting Maryland homeowner’s achieve the best outcome for their family.

Let’s Strategically Plan Your Foreclosure Case Today

Call (800) 598-7510, or (410) 860-8479

Together We Will Create a Tailored Plan of Options to Provide Foreclosure Recovery

Our Team of Consultants are professionals that are experienced and understand the obstacles of default and that foreclosure can be overwhelming emotionally and physically. We pride ourselves on our ability to create outstanding customer services by assisting Maryland homeowner’s one-on-one through the entire request for a Loan Modification, Short Sale, Deed in Lieu of Foreclosure, Foreclosure Mediation, and other available options that may be able to help homeowners avoid foreclosure and provide a second chance for home relief.
0 votes Thank Flag Link Fri Jan 3, 2014
A short sale will look better but has the same impact score wise as a foreclosure or a deed in lieu. The only difference is how you handle your credit after the fact, and the time frame to being able to purchase again. Some lender will approve you after a short sale however they may require the same time frame as a foreclosure. Whichever you decide be sure to keep diligent records of the process.

Best of Luck;

Christina Solorzano;
CEO & SR Credit Repair Specialist at
Everlasting Credit Repair
Ex-Mortgage Broker of 10+ years
http://www.everlastingcredit.com

We also have DIY Packages available.
0 votes Thank Flag Link Fri May 3, 2013
Short sale is by far the best option on your credit rating.
Deed in Lieu is really a foreclosure, just a more "responsible" kind - when the owner saves money to the lender by not putting the lender through foreclosure law suite expenses (DIL can be done only if the seller is qualified).
Foreclosure causes the most damage to the credit history - and every time you have to apply for a credit/mortgage you'll have to disclose that you had a foreclosure (or it is fraud). Also, most jobs requiring clearance won't accept people with foreclosure on their record.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Tue May 1, 2012
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website. http://consumer-action.org/

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm


The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.


Trevor Curran
NMLS #40140
0 votes Thank Flag Link Sun Apr 29, 2012
This is a hard question to answer because anything you do financially if it is good or bad will be attached to your credit rating. Any negative action explained or unexplained can affect your ability to purchase anything from a small transaction at your local store to the purchase of a house. The only answer that you can say is "yes" it will most likely be the reason you can not purchase. If a lender finds a low credit rating it is directly going to hurt your chances regardless of the type of sale.
0 votes Thank Flag Link Thu Nov 26, 2009
It will depend what you can negotiate with your lender. On a short sale you can get the credit bureaus to report Paid in Full on your mortgage. There are many outcomes that may be available to report. With a great Realtor this should be part of your process. I rec'd a short sale because it shows the lend4er you are making an attempt to recover their lost funds.
Jenny Talasazan
0 votes Thank Flag Link Tue Nov 24, 2009
It depends on how the lender reports data to the 3 credit reporting agencies. All if reported correctly have a negative impact on your credit scores.

Few suggestions:
a) Try working with lender
b) If push it then short sale property
c) Deed in lieu of foreclosure or short sale

You need obtain all in writing.

I have been a listing / buyers agent for short sale. Happy work with you

If you are to move from current residence YOU need to do so prior impacting your credit report, we work with many potential tenants MOMENT any of these hit your credit report you will need to pay double, triple deposits, potential rejection of your application.

Contact my office discuss pro's and con's where I can fact find more

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911

http://www.lynn911.com
0 votes Thank Flag Link Thu Nov 5, 2009
Yep, a short sale if the best of the 3 poisons. However, you would still have to qualify for it and show hardship.

I am working on 5 of them right now and they are tough on the sellers and the process is lenghty but worth saving your credit.

Naima
214-289-8555
Naima@Sumner-Realty.com
Web Reference: http://www.SumnerRealty.com
0 votes Thank Flag Link Tue Nov 3, 2009
If your home is foreclosed, it is something you have to answer the next seven years or more that it appears on your credit, from the date it was added. Every time you apply to rent, lease, buy, etc. If you do a deed in lieu of foreclosure (many banks do not agree to doing this) then it can possibly be avoided, depending upon if they file the legal process or not. A short sale would be the best case scenario of the three situations you presented, simply because in a short sale the bank agrees to accept an amount short of what you owe them, which means you will likely have late payments show up, but it is the proverbial lesser of two evils to have follow you around, and is easier to recover from.

I hope that was helpful to you!

Your Real Estate Resource,
Nicole Arenas, Realtor
William Davis Realty
214-991-9507
0 votes Thank Flag Link Mon Nov 2, 2009
Exactly Kerry!

A short sale is not necessarily part of a foreclosure process. If you get to it early enough, it nevers becomes part of the process.


Jackie
0 votes Thank Flag Link Mon Nov 2, 2009
Frisbee

It actually makes no difference. Once the foreclosure process starts (ie:you get a letter in the mail from the lender that says they are starting foreclosure) it gets listed on your credit report as "foreclosure process started". Once this happens almost every lender considers this a foreclosure even if you end up selling the home before the bank actually takes it. This is a very common misconception for many people in your situation. I hope this helps.
0 votes Thank Flag Link Mon Nov 2, 2009
Oh, and deed in lieu does show up on your credit report:
http://www.mortgagefit.com/deedinlieu/affectcredit.html
0 votes Thank Flag Link Mon Nov 2, 2009
OMG! Short Sale, and I love doing them. I've done three this month. Give me a call or email and I can explain everything to you.

Kerry Thornhill 214.205.2056 kerrythornhill@gmail.com
http://www.kerrythornhill.com
0 votes Thank Flag Link Mon Nov 2, 2009
Your Credit report will never show Deed In Lien. Short sale vs. foreclosure is determined to how the lender submits the data. None are good on your credit.
Have you tried working with the lender to stay in the home? Maybe even renting it until you can sell it could be an option?
ood Luck,
Jerry
0 votes Thank Flag Link Mon Nov 2, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer