About to do a Short Sale

Feb 162011
 

I divorced last year.  Due to the housing market my ex and I will be proceeding with a short sale (or at least that is the hope if the mortgage company approves it).  We have an offer which is 45% less then what we owe on the property.  It is a condo and in our area they just aren’t going from much anymore.  If the mortgage company does not accept it then we will be going into foreclosure.

 

We are current on our payments and were informed by the mortgage company that we had to be late on payments before they would consider a short sale (at least 31 days).  Since we have all the paperwork in they think it won’t take long to process the short sale if it is accepted.

 

Everything I have read states that a short sale will be considered a foreclosure with FICO scores.  I am just curious how much of a hit people have taken in the past when they do a foreclosure/short sale.  My FICO is 769, I have never been late on a payment, good credit history, I don’t have the longest credit history but it is long enough and my revolving credit will be completely taken care of this month.

 

So, I’m just trying to figure out how big of a hit my score take?  I realize that being this high will likely make it fall even harder (which is unfair if you ask me) but I would like to have an estimated number.  Also, how has everyone built their credit back in 2 years or less?  I was thinking that the only thing I could do was make small purchases (gas maybe?) and pay them off that month before they have an interest hit for a year or so.

 

I have been doing the “Total Money Makeover” which means the only reason in the future that I will need a high credit score would be for a mortgage only.  I am looking to get a mortgage in abut 3 maybe 4 years if all goes according to plan and I would like to have my credit score where it is now or better.

 

Thanks for your help in advance!

GW with a balance owed or after paid in full for closed credit cards

Jan 192011
 

I have several credit card accounts that were closed when I went very late.  Two accounts reached 150 days late, one 90 days, and one 60 days.  Approximately 6 months after I brought the accounts current, I attempted GW letters with no success.  I’ve recently passed the two year mark since I was late on any account.  I was thinking of trying a new round of GW letters.

 

I still have minimal balances on the cards.  I can pay them all off next month (feel like throwing a party when the last payment posts).  Are they more likely to respond favorably to a GW letter if I send it now while I am still making payments or does it matter?  

 

The cards are Cap One, BofA, Chase, and Discover.  I have since opened a separate Cap One card never late, so I can try to point to that as far as a continuing positive relationship.  I have a mortgage and HELOC with BofA that also went 150 and 120 days late at the same time, but those accounts are also caught up and haven’t been late in two years, so I can try to point to that in terms of rebuilding a positive continuing relationship.  But with Chase and Discover, I don’t have anything continuing with them.  Once I pay them back completely, do they have any incentive to remove the lates through GW?  Of course, it’s not like I’m going to threaten to stop making payments if they don’t remove them, so I don’t know that it matters one way or the other, but thought I’d ask.   

 

I have also thought of trying a second round of GW letters for the mortgage and HELOC, but I am nowhere near paying those off so my question doesn’t specifically apply to them.  Plus, I’m wary of attempting GW with them again.  After my first GW letters, they reported in the comments section “Account information disputed by consumer, meets FCRA guidelines.”  I was finally able to get that comment removed on all reports for the HELOC, and EQ has removed it from the comments for the mortgage, but I can’t seem to get it removed from the comments on TU. 

 

Thanks in advance for any advice.

Which taxpayers are currently making use of the mortgage interest deduction?

Nov 302010
 

I ask this, because an article written by Scott Burns (writer for Dallas News), believes that very few people can take advantage of the mortgage interest deduction.

 

http://assetbuilder.com/blogs/scott_burns/archive/2010/11/19/would-you-miss-the-mortgage-interest-deduction.aspx

 

 

I know that we are able to make use of the deduction, because of 2 things: Mortgage interest is under the standard deduction by a little more than $1,000/yr. This is even on a short term (15 year) mortgage. However, our property taxes are relatively high (slightly over $8k), which is just about 2.3% of the appraised value of our house. So, between the 2, we are easily able to make use of the mortgage interest deduction.

 

So, who else is able to use the deduction?

Settle or Pay in Full

Oct 152010
 

First things first thanks to all you guys for all the knowledge on this site…Its truly awesome. Ok, I finally got the score I needed for the mortgage but they said there are 5 old accounts from 2004-2007 that must be paid before I can get the loan (its not just score you guys you can’t have collections with a balance). I contacted all of them and they are all offering a settlement but my middle score is 627 and 620 is the cut off. Is it true that paying old debits will lower my credit score and should I pay in full or settle. Thanks in advance!

How bad is settlement really?

Aug 052010
 

Ok, this is a two parter:

1.  I am trying to raise my score to buy a house, not immediately but soon(6-12 mths), so I am trying to get rid of all CA’s on my CR’s.  One of them has sent me a settlement for about 1/3 of the $1000 debt.  If I take this settlement, how bad does it look having ‘Paid Settlement’ instead of ‘Paid in Full’ when I apply for the mortgage, as well as effects on my score.

2.  I have been having good luck lately it seems, because when I call OC’s of accounts that have been with CA’s for years, they gladly take full payment and say the CA reporting will fall of my CR since I have paid them the debt.  Is this true, or am I getting taken for a ride….just made the payments, so I haven’t waited to see if they indeed fall off.

Related Blogs

Scores Jumped up Dramatically – Now Getting Mortgage, What Happens Now?

Jul 082010
 

In January I applied for a home loan. The lender laughed at me. My scores were

 

TU: 585

EX: 553

EQ: 561

 

I now applied for a loan again in June, was approved, and am closing Escrow on the 16th. My scores are now:

 

TU: 687

EX: 713

EQ: 655

 

Question is, what’s next? Will the mortgage take a dip in my credit? Also, I went from 90% credit usage to about $35. I expect to be below that number by January, but I’m going to be maxing, or close to maxing many of my cards for new purchases for the home. Any idea of what that will do? What should I expect my scores to look like (rough estimate)?

 

Finally, I’m going to refinance my auto the day escrow closes. Any suggestions why/why not? I figure, next month, my credit will take a hit, so I should get a lower interest rate right away to avoid not being able to refi until later… I’m at 13% for auto (4.75 for mortgage).

anyway to have spouses income but not on mortgage

May 172010
 

I know this has been asked before, but I’m curious if there is any scenario where a spouses income could be included but they are not on the mortgage?

 Older Entries