Short Sale vs Foreclosure

by Rosie
(Louisiana, USA)

Ask Kate about Short Sale vs Foreclosure - Did short sale mess with my credit scores? Hi Kate, Even with excellent credit, we can't refinance due to previous short sale.

Rosie continues... We have excellent credit, but also had a short sale about 4 months ago.

But we had no other options because we had moved out of state and could not sell and had troubles renting. Our renters left with unpaid bills we had to pay, house needed repairs, and we could not keep up with the payments because of all that.

Now our bank won't even talk to us and all other lenders tell us there is nothing they can do for us. Is there no program (government) that we qualify for???

Kate Answers: Short Sale vs Foreclosure - Will short sale be better for my credit scores?

Dear Rosie,

I don't like to be the bearer of bad news, but excellent credit is now in the past tense, at least for a couple of years.

With a short sale, the property is sold for less than the full amount of the mortgage. So the lender does not recoup his money.

Because the short sale is reported to the credit bureaus, the seller's credit history is affected. The bottom line is that a short sale wreaks havoc with credit, very much the same as going through a foreclosure.

How To Recuperate From Short Sale - Loan Modification & Credit

But if you have spent much time at all on Get Your Best Mortgage Rate, you know I am persistent and encourage my Readers also in this respect. So while it's true that you may be waiting a couple of years to refinance, I don't suggest sitting on your hands.

In the meanwhile, ask your loan servicer about...

• Home Affordable Modification Program (HAMP)

and


• FHA Short Refinance (For non-FHA mortgages)

Educate yourself by...

• Getting in-depth answers to common questions about Mortgage Loan Modification

and


• Working on improving your credit score to the extent that you will be welcome with open arms by a mortgage lender in a few years.

In an opposite situation, you might be interested to read this letter from a homeowner pursuing a loan modification before a short sale as well as my response... Negotiating A Short Sale After Loan Modification.

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Rosie, one more thing. Is this page is helpful to you? I'd like to hear back from you.

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Have You Seen The Most Recent Ask Kate Answers

• Is This Nationwide Mortgage Lender My Only HARP Refi Option
• How Much Is PMI for FHA Loans
• Is HAMP A Negative Amortization Loan

Best wishes,

Back to more Ask Kate Questions and Answers at
HAMP, HARP,FHA Short Refinance & Loan Modification Q & A from Short Sale vs Foreclosure

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