Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of-foreclosure
Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like your job, yes employers are checking credit records these days.
Your credit score will be reduced by 200-400 points, short sale a little less 100-200 points.
All forms of foreclosure stay on your credit report for 10 years.
After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
In addition to the waiting period, most loans require a minimum down payment of 10% and a minimum FICO score of 680. The home purchase must also be the principal place of residence, not a rental nor a vacation home.
Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.
A few questions,
Most importantly whom ever you decide to use should be very experienced with Short Sales.
Lenders in Second position who are under water know they will not get anything if your home forecloses, so they may tend to negotiate to get at least some money instead of no money... If your realtor is a good negotiator they will offer at least a percentage to the 2nd.
Who is the 2nd lender? Are both lenders the same?
One options is to settle the 2nd loan before you even short sale the home.
Lenders are really getting smart these days, they dont want to take homes back as a foreclosure they really would prefere to work with you so depends on who your lenders are.
You need to search for successfull negotiators make sure they have dealt with homeowners in your positions and that they are not just giving you lip service.
Home Retention Specialist
925 699 5041
They may not agree to short the property. However, lets look at the benefits of a short sale. FOR FREE a short sale costs you nothing someone (realtor) on your behalf will negotiate a with the lenders to get you out of that property and you can then get on with your life. Also you can return to home ownership quicker after your short sale than any other distressed sale situation.
I wrote a book on the subject if you would like I can send to you. Good luck!
The Credit Repair Expert
Have a great week!
Darrell Muhammad, Realtor
Avalar Real Estate & Mortgage
In my negotiation of short sales, I start with a predetermined percentage of what the 2cnd is owed. That amount is deducted from the payoff to the 1st. These amounts are presented as a net return, and the negotiation begins.
Hiring an experienced short sale agent is imperative.
Contact Darron Mason @ Karpe Real Estate / Bakersfield. 661-847-4800
If you decide to pursue the short sale route make sure that you are working with a competent short sale agent & that you seek legal, tax and credit advise from the appropriate professionals in your state. If you'd like assistance in finding a knowledgeable professional please don't hesitate to call or email me.
Best of luck with your decision!
With Your Success in Mind,
A short sale is definitely better than a foreclosure.
Please feel free to call and discuss your situation.
Roberson Real Estate