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How will a short sale, in California, affect a homeowner's credit score even though the homeowner is NOT behind on his payments?

Asked by , Sun Nov 29, 2009

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Elizabeth Powell’s answer
Depending on the lending institution it could possibly be recorded on your credit summary as a SHORT SALE. It will remain on your credit history for 2+ years, typically 2 or 3. You ARE eligible to purchase a home immediately. You cannot just decide to have a short sale though, you have to prove you are in need of a short sale and sometimes if you are paying your mortgage on time you might not qualify for a short sale. Talk to a KNOWLEDGABLE agent.
My colleague is in escrow with a client who is not late on one mortgage payment and was successfully approved for a short sale merely because he threatened to stop making payments.

But just because you are eligible, doesn't mean you necessarily should. You should reflect on your current situation and decide if you can afford the home you want to purchase if you have a successful short sale. Make sure you get into something that you are happy with and that you feel comfortable with (the loan I mean).
0 votes Thank Flag Link Fri Sep 13, 2013
I think that the info in the previous answer is not factually based.
The credit score is not affected by a short sale, as FICO (the scoring organization) has no determination as to any score change in a short sale situation. Any that is a verifyable fact.
Additionally, after a short sale, you are IMMEDIATELY eligible for a Fannie Mae mortgage. Even if Fannie took a loss on your short sale.
BOTTOM LINE - Do a short sale, make your payments without going over 30 days, and your credit is not affected at all. Just be careful and prudent when you hire an agent...many now PRETEND to know about Short Sales, as demonstrated by the previous answer. Find someone that really knows.
0 votes Thank Flag Link Mon Nov 30, 2009
It depends on the sellers circumstances and the way the bank publishes the payoff on the sellers credit report. In many cases if your credit is good and you do a short sale you can buy a home again in as little as 18 months. If you or any one you know is thinking of doing a short sale here is a link for some frequently asked questions and answers… and here is a link to get started on the short sale process.… You can rest assured with my knowledge and experience your short sale will be a positive choice for your future.

John & Sarena Villaescusa
Keller Williams Realty
Cell: 562-818-2671
Web Reference:
0 votes Thank Flag Link Sun Nov 29, 2009
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