Short Sale Success

[Marcus]

My short sale story:
I purchased in 2007 for $520,000
in 2011 I still owed $475,000 and was approximately 200K underwater.
I was also facing a household reduction of income from $150K yearly to $100K yearly (Hardship!)
Home was listed in October 2011. I was free and clear in January 2012. No PMI or secondary loan. Just one Jumbo with Bank of America.

In January, before close, my credit score was 811 according to Experian

In March I ran my credit scores and got this:
Experian 692
TransUnion 698
Equifax 793

The three report my short sale like this:

Experian - Account legally paid in full for lass than the full balance.
TransUnion - Settled - less than full balance
Equifax - Closed or paid account/zero balance/Settlement accepted on this account

I never missed a payment. Bank of America kept my last mortgage payment even though I moved out in the middle of the month. They also kept about $3,500 that was in my escrow account. I'm okay with that, They only got about $280,000 from the proceeds of the short sale.

I've been preapproved for a new home loan with Wells Fargo. But only if I buy a smaller sized home (not taking advantage of market conditions) or if I move to another city (not within a reasonable commuting distance). I'm testing thee waters now.

[Martinique]

Thanks for sharing your story. I am just beginning the SS process. I hope it goes as smoothly as yours.

[lpinlb]

Good to hear - we are just in the process of starting our BofAcooperative short sale with our own chosen realtor. House is listing this week. After 30 months of non-payment and 6 attempts at loan mod, we just want to move on! We also owe about $475k and are $200k underwater in LA county. We are hearing that we should be eligible to purchase again in about 2 years but that's amazing you are already pre-approved!

[Evan Bedard]

That is great news Marcus congratulations on the short sale! You are one of the lucky ones to get approved without missing a payment and because of this you may qualify for a new home loan right away!

[Martinique]

I was told that missing payments would give my case priority with the bank. I've missed one payment sofar. I am not sure it's the right thing to do because I do want to buy another house asap.

[Evan Bedard]

I was told that missing payments would give my case priority with the bank. I've missed one payment sofar. I am not sure it's the right thing to do because I do want to buy another house asap.

While it is true you may have a better chance receiving a short sale if you fall behind on payments, it is definitely possible to do so as Marcus has.. You may be able to qualify for a new mortgage right away after the short sale if you do not fall more than one month behind. However, if you end up 60-90 days plus behind prior to closing you will have to wait 2+ years to qualify for a new home loan.

[KungFuJoe]

To the OP, if you don't mind, can you let us know how this affected any credit cards in your name? Did you find your credit limits reduced, rates go up, card cancelled, etc?