A foreclosure will have a very bad effect on a homeowner’s credit and the bank will in most cases take a bigger loss than they would in a short sale. A sellers credit in a short sale will be.
While the Obama Administration’s home affordable programs haven’t been nearly as effective as predicted in actually preventing foreclosures, they have had the effect of extending the foreclosure..
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A) Yes, the short sale will be reflected on your credit report and will result in a reduction of your credit rating. However a short sale has less impact than a foreclosure would and as long as you continue to fulfill your other credit obligations in a timely manner, recovery from the short sale could be as little as 1 to 2 years as opposed to.
A foreclosure dramatically affects your credit score. Fair Isaac, the company that created FICO (credit) scores, drops credit scores from 85 points to 160 points after a foreclosure or short sale. The amount of the drop depends on other factors, such as previous credit score.
The complications include financial factors such as possible deficiency judgments, bankruptcy and credit rating. just throwing good money after bad. As an alternative, should you consider a short.
Facing Mortgage Foreclosure. If you are a home owner and have fallen behind on your mortgage payments, you are not alone. If you are faced with mortgage default or foreclosure, arm yourself with information, ask for help, and take decisive action to protect your interests.
Bruce Asks: Dear Gina, I have a bad credit mortgage and my interest rate is going to over 10%. I always planned to clean up my credit and refinance but now my home is worth less than my mortgage balance. I can’t refinance, but I won’t be able to make the payment either. Will my lender approve a short sale or do I have to miss a few payments first?
Foreclosure for sale signs are going up in the tens of thousands as we begin paying the price for the excessive living that the Federal Reserve has provided us. No one knows exactly where this will end.