...but I also tell my sellers, on average, expect two years for qualifying for another mortgage, but that's anyone's guess.
Of course I only addressed the rare situation above. The more common situation is that the borrower receives a waiver of the deficiency, in which case the item will be noted "settled for less than amount owed"
Or; if the bank does not waive the deficiency, then the outstanding balance shows up as bad debt, delinquent and owed. That is not good, but is slightly better than "foreclosure"
Negative information can stay on the report for seven years after the last activity on the account...The key is "activity"
the negative information might be older than seven years.
Example: Loan is marked delinquent in 1999. Workout plan is subsequently agreed to between lender and borrower. Loan is finally paid off in 2004. That loan is still on the report because the final activity (payment in full) was less than seven years ago.
Most credit analysts ( lenders, landlords, employers) will weigh your recent credit history of the past 3 or 4 years as more important than your ancient history.
Credit analysts look for patterns. People who had good credit before a bad episode, have a fresh start and keep their new bills paid are treated better than people who had bad credit for years, then had a short sale, then continue to pay their new obligations late. (or not pay)
I'd be happy to refer a credit repair professional if you like. Just call or email. Good luck.
I would advise you to call the three major credit reporting agencies or a credit expert to get the most up to the minute and correct information, as things are always changing.
It is believed that currently there is not "SHORT SALE" negative remarks verbatim on credit reports, however there is a "paid short of what was owed", or "not paid in full" or similar remarks that do go on your credit report in relation to the loan. That stays with your credit report the regular 7-10 years that any bad remarks stay on your credit report.
Additionally, most banks will require that your monthly payments will be behind, i.e.--late, so those 30 or more days late will show on your credit report as well--and could be more detrimental than the "not paid in full remarks".
In all, short selling can still be better than the word "FORECLOSURE" stamped on your credit report, which stays with the report for 10 years or so, can hinder your getting further credit. In a job opportunity situation, some job apps ask if you've had a foreclosure--and with short sale, you can still say "no"--and getting a home loan in the near future is difficult after foreclosure.
Hope this info helps!
Great question. The first question is whether or not it will even be reported. Here is why:
1.) The short sale approval can be negotiated with some lenders to consider the note "paid in full". Therefore there would be nothing but a positive credit reporting on that account. This possibility is very dependent on whether there is only 1 loan (if there are 2 - both have to state "paid in full") , whether it was occupied as a primary residence, and whether the loan is a non-recourse loan (purchase money without any re-finance or equity line).
2.) Your credit can be affected by late/missed payments related to the short sale. This is normally the more damaging report on credit for a home owner under water on their mortgage.
If there is a negative reporting either through late/missed payments, or the actual short sale, work with your agent or attorney to negotiate the short sale approval to lessen this report. It doesn't always work but is very much worth the try.
The specific amount of time your credit will be affected will be dependent on long it will take to work the negative hits reported. Work with a credit counselor to help you recover your score.
Check out this web site for some great answers on repairing credit. (This is not an endorsement simply a source of information.)
Hope that helps.