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mmdesq
mmdesq, Attorney
Category: Bankruptcy Law
Satisfied Customers: 458
Experience:  Attorney with 13 years experience.
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Finally my Short Sale from Hell closed! The house was included

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Finally my Short Sale from Hell closed! The house was included in my Chapter 7 Bankruptcy in 2008. I tried to stay in the home but couldn't financially do so. It had been listed for sale for what was owed on it. No luck. Finally 2 1/2 years ago my realtor suggested a Short Sale. The bank took over 2 years to finally approve a sale. I had a judgment against me from the HOA which was settled at closing. The judgment appears on my credit report. I got a letter from the title company stating that the judgment was satisfied and sent it to all 3 credit reporting agencies. My question is will the sale of the house show as a Short Sale on my credit report, since it now shows as Discharged through Chapter 7 Bankruptcy in 2008. I've worked very hard to bring up my credit score to the mid 700's since the Bankruptcy. I'm renting now, but would like to find a place that I can spend the rest of my days in, possibly a mobile home in an adult community or even a house. Can my credit take 2 hits? 1 from the Bankruptcy and then again with the Short Sale? I looked at the HUD-1 settlement statement and it says nothing about a short sale.

mmdesq :

Good Monring:

mmdesq :

There should be two entries regarding the home debt on the credit report.

mmdesq :

Your personal obligations to pay for the loan borrowed was discharged in bankruptcy in 2008 and should be noted as such on all three credit bureaus.

mmdesq :

The mortgage obligation against the security, i.e. the house was resolved as a short sale which is a compromised settlement and release.

Customer:

And this will show as a Short Sale on my credit report? I was hoping I wouldn't take 2 hits, that the Discharge through Chapter 7 Bankruptcy would take care of it. I'm trying my best to rent with the option to buy something that I can spend the rest of my life in.

mmdesq :

Since your credit report is a listed of personal liabilities and not assets, I would recommend disputing anything being added to your report regarding the mortgage debt other than noting it was "satisfied". The creditor may try to report is was settled, this has a negative impact on your report. If the creditor does this i would file an on line challenge with each credit bureau.

Customer:

That is exactly what I did. I sent each credit reporting bureau a copy of the letter from the title company stating that the judgment was satisfied. I disputed it with all 3 bureaus. I heard back from TransUnion telling me there was nothing on my credit report, which was wrong. I then called them and hopefully it will be resolved.

mmdesq :

If they report it as settled, challenge the report on line on each bureau's website. It is a fairly easy form to complete and requires the creditor to respond. If they dont the information is removed. Technically, I think they can mark it as settled, but I would still challenge if they do as you have nothing to loose. They often dont follow up.

Customer:

Once this judgment is resolved, I realize that it can stay on my report for up to 7 years, but will my FICO score rise?

mmdesq :

The HOA cost should show as satisfied and not settled. That you can demand be accurate. You should send a letter to the HOA board requesting written confirmation of payment in full. This can then be sent to credit bureaus.

Customer:

I most certainly will do that! Thank you so much for helping me!

mmdesq :

Your fico score will rise in the 7 years afterwards assuming no new negative credit info.

Customer:

Trust me, there is and will be no more negative credit information!

mmdesq :

I am glad to hear the idiot bank finally approved your short sale. That was best option for all. Too bad it was not done 2 years ago and avoid all the extra stress and costs.

mmdesq :

I wish you the best of luck. Take Care.

Customer:

They lost 6 contracts due to not responding. The 7th person held on for 9 months only to be told they raised the price. He walked. The last one was a cash offer and the bank wanted $5,000 more from them, but they went for it. Finally, it closed on 5/28.

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