Sacramento Short Sale Specialist Learns About Bankruptcy After Short Sale
Sacramento Short Sale Specialist Learns About Short Sale After Bankruptcy
Sacramento Short Sale Specialist, Sacramento Certified HAFA Specialist Learns About Short Sales After Bankruptcy
As a Sacramento short sale Listing specialist, REO Listing Specialist and Folsom, El Dorado Hills and surrounding area’s buyers agent in this crazy market, I meet all kinds of people, see all kinds of properties and get all kinds of questions…
I build my business around relationships and focus on bringing value to the table, value in the form of real-time information, advice, understanding and collaboration. My goal has always been to understand where a person is and where they are going, and then figure out how I can help. There’s no better place to do that then the open house.
Yes, even I do open houses! And I love them! There is no other industry I know of where you can just throw out a bunch of signs and people who are interested in your product will stop what they are doing and just walk in to your new “place of business” (where you don’t have to pay rent!) and start asking questions, start a conversation and begin a relationship.
So I’m doing an open house the other day at one of my Fannie Mae owned REO’s in a gated community in El Dorado Hills. I met several neighbors, a few younger couples who are visiting their parents in the community here and one couple that will be moving here shortly. Among the visitors was also a very nice lady that just followed my open house signs in and and stopped by just out of curiosity. She told me about their situation, that they had just been dismissed from a bankruptcy and that they still had a home that was in foreclosure. You see, a bankruptcy dismisses the debt associated with a home, but the homeowner is still on the deed. There must be either a died in lieu of foreclosure, a foreclosure or a short sale in order to get them off the deed. There are no other mechanisms for getting the deed cleared and putting the property back in the name of the bank or a new owner.
I asked if she would consider a short sale. She asked “what will that do to my credit score?” I told her I thought it would not show up, because the mortgage was already discharged, but I would find here some information and get back to her. It sent me on a journey that lasted nearly a week.
As a short sale specialist in the Sacramento area who is also a HAFA Certified Short Sale Specialist, I have a great understanding of the process that the bank goes through in processing a short sale after bankruptcy; after the owner has filed bankruptcy. I have done three of them. They are easy; after the initial short sale package is submitted the bank needs no updated pay stubbs, they never ask for a contribution, they always go much faster than most short sales. These people had all three been told by attorneys that the short sale would keep them out of foreclosure and that s why they should do it, so I thought I knew the ramifications and the credit consequences, but the next several days of studying, asking and reading brought much more clarity to my knowledge.
The information I found says this: Every credit reporting company has it’s own policies and procedures, and they are always changing; but right now, if you have filed a chapter seven bankruptcy as far as the “big three credit reporting companies are concerned, the foreclosure will not show up. You see, there is no debt any longer associated with the mortgage or deed of trust on your home, but the credit “hit” has already taken place and there is can be no other recording on you credit score, even if your bank forecloses on the home, or you do a died in lieu, there is no more reporting done to the reporting agencies. But, as I found out, if you do a short sale, the bank will record the short sale, giving yet another blow to your score and re-setting the clock on your recovery.
Remember- I am not a lawyer, I only got this from attorneys her in Sacramento and through second-hand information from a banks attorney, so make sure you don’t take this as legal advice and seek out a lawyer and a credit specialist, to either confirm or prove it wrong; but this is the way I understand it.