A short sale will affect your credit. However the short sale itself is not what causes the big credit point hits. It's that coupled with missing payments. Missing payments is what does more damage. However in under 2yrs, you can really boost your credit score back up by remaining current on all other debt obligations. 

It is possible to complete a short sale without ever missing a payment. It is possible to do a short sale without having a severe hardship. 

If this is your primary residence or you lived in the property 2 out of the last 5yrs, you can qualify under the Mortgage Debt Forgiveness Act of 2007, so the IRS or the State can't tax you on the negative amount. 

It's not automatic that the bank won't go after you for a deficiency judgment on the negative balance, however it's something that I'm able to negotiate OUT. If your 2nd lien was a PURCHASE MONEY loan than the 1st will need to offer them 10% of that $75k balance in order to get the 2nd lien to Release you as paid in Full. Again this is something that we negotiate for the 2nd lien holder to do. 

It may be possible to get the $3k for relocation expenses, this is under the HAFA program. This Government program, much like the HAMP program for loan modifications has been more or less a complete failure. Your 2nd lien holder will likely NOT agree to accept the Max the 1st can offer them, which is $6K. They will want a min. of $7500, so that will kill your attempt for going through the HAFA program. 

I negotiate short sales for clients successfully within a 285 mi. radius of where I live. I don't need to be your next door neighbor to assist you with selling your home as a short sale. Please email me directly so we can talk about this further. 

Madelaine Kolisnyk


Views: 22

Comment by Madelaine Kolisnyk on May 25, 2011 at 12:03pm

“IMPORTANT NOTICE:  Prudential California Realty is not associated with the government, and our service is not approved by the government or your lender.  Even if you accept this offer and use our service, your lender may not agree to change your loan.  If you stop paying your mortgage, you could lose your home and damage your credit rating.”  


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