by Linda on June 28, 2009
Foreclosure, Deed in Lieu of Foreclosure, Short Sale, Loan Modification and Bankruptcy can all have long-lasting impact on an individual’s ability to obtain credit. Homeowners need to get the facts before making critical decisions that will impact their lives for many years to come. In this series of seven blogs, I’ll be examining each of these options in detail so you can get a better understanding of the myths and realities surrounding them and how they affect your credit.
One of the recurring themes in my book, The Big Score, and something I always emphasize to my clients is that being proactive the key to ensuring your credit score is as high as possible! In the case of your mortgage, the way to do this is by trying to renegotiate the terms of your agreement before things get out of control.
Loan Modification
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by Linda on June 18, 2009
For years, credit experts, including me, have told people that a foreclosure is the worst possible option for homeowners who are upside down in their mortgage and is something to avoid at all costs.
One of the alternatives to foreclosure that homeowners have is a short sale, which is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship that is usually related to the current real estate market climate and the individual borrower’s financial situation. The homeowner sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. Unfortunately, some of the characteristics of a short sale are changing in a way that can potentially hurt your credit even worse than a foreclosure, and here’s why.
It used to be that only homeowners facing a foreclosure had to worry about being sued for the deficiency amount on a foreclosure sale. It all depended on what state you were in, and whether or not the loan was a recourse or non-recourse loan.
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Foreclosure, Deed in Lieu of Foreclosure, Short Sale, Loan Modification and Bankruptcy can all have long-lasting impact on an individual’s ability to obtain credit. Homeowners need to get the facts before making critical decisions that will impact their lives for many years to come. In this series of seven blogs, I’ll be examining each of these options in detail so you can get a better understanding of the myths and realities surrounding them and how they affect your credit.
