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Credit Questions after a short sale

Discussion in 'Credit Repair' started by rochelle, Jul 6, 2010.

  1. rochelle

    rochelle LoanSafe Member

    Last year we sold our house via a short sale. It was a very long, painful process, but so glad to be done and on the other side. Now we are moving forward with our lives, trying to fix our credit, etc. I am looking for some credit advice. First, anyone have suggestions of who to go through to get copies of your credit scores. Is it possible to get free copies or do you ahve to pay? In California does anyone know how long until banks will allow you to get another mortgage after a short sale? Any other tips to restore credit?

    Thanks for any suggestions.
  2. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Hello,

    Here are the details about your rights under the FCRA and the Fair and Accurate Credit Transactions (FACT) Act, which established the free annual credit report program.

    Q: How do I order my free report?

    A: The three nationwide consumer reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report.

    To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on the back of this brochure; or you can print it from ftc.gov/bcp/conline/edcams/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

    FHA insured home loans are typically not available to borrowers whose home was foreclosed, SHORT SALE on or given a deed-in-lieu of foreclosure within the past 3 years. However, if the foreclosure of the borrower’s primary residence was the result of extenuating circumstances, an exception may be granted if they have since established good credit. With no lates prior to the 12mo's of your short sale and current at the time, you can buy right away, with lates it is now 3yrs (same as a foreclosure), these are for FHA loans.

    Here is info from Fannie Mae's Q&A:

    If a borrower has completed a short sale and was never delinquent on thatmortgage and is now attempting to purchase a new primary residence, will Fannie Mae purchase the loan?

    If the borrower is purchasing a new property and the previous mortgage history complies with our excessive prior mortgage delinquency policy and does not have one or more 60-, 90-, 120-, or 150-day delinquencies reported within the 12 months prior to the credit report date, the loan is eligible for delivery to Fannie Mae, provided the lender or servicer who completed the short sale has not entered into any agreement that obligates the borrower to repay any amounts associated with the short sale, including a deficiency judgment.

    Q6. Is a preforeclosure the same as a short sale?

    No, not necessarily, although historically the terms have been used interchangeably. For Fannie Mae’s purposes, a preforeclosure assumes that the borrower has been delinquent in paying his or her mortgage and the servicer/investor agrees to accept a lesser amount to avoid the time and expense of a foreclosure action. A short-sale, however, can refer to situations in which the servicer/investor of the mortgage agrees to a payoff of a lesser amount than is actually owed, even on a current mortgage, to facilitate the sale of the property to a third party.

    • A good way to rebuild your credit is to have a few open credit accounts.
    A vehicle loan and a couple credit cards with low balances that you pay every month should help you get your scores backup overtime. You do not want to have too many open accounts because this may hurt your scores. Please keep in mind that there is no fast or easy fix when it comes to building up your credit scores. It takes time, patience and making your payments on time over a period of months to years for your scores to raise.

    After two to three years an individual may be able to receive a mortgage and other big ticket items again if they choose. Many lenders will make strict requirements such as more of a down-payment up front and they may charge a higher interest rate. This is due to the additional risk that they are exposing themselves to after a borrower has declared a deed in lieu.
    • After all is said and done, it is imperative that you make all of your credit payments on time.
    Do not miss a payment on any credit account or you may find it difficult to obtain a loan of any type. A deed in lieu may not be as major of a credit event as a total foreclosure but it is not like missing one month of your credit card payment. It is a major credit event that shows a large secured asset was unable to be paid for. Lenders want to be sure that they can trust their borrowers to make their mortgage payments on time each and every month.
  3. goodyphilips

    goodyphilips LoanSafe Member

    thats right having credit cards are the best way to build your credit scores and yes one should make sure that payments are to be done always on the time with out fail.

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