Losing A Home As a Short Sale No Better Than Foreclosure
Do not make this mistake: Don’t hire someone to help you foreclose on your home or get a short sale for your home. You are wasting your money.
Next, don’t make this mistake: Don’t allow your home to go to short sale or to foreclosure without first contacting an FHA loan representative to find out if there is any help available to you. Most home loan borrowers will find some options to help them avoid losing their home to either of these financially devastating situations.
What happens when you go through a short sale or a foreclosure? What you may not realize is that both have the same end: you will lose your home and you will have long-term damage to your credit record. There is some evidence that both are just as hurtful to your credit, even though many will try to “sell” you on the idea that home foreclosures are worse on your credit than short sales.
What you do not need is to buy information or advice from a third party, especially when you are already having a difficult time with finding money to pay your lender.
Remember This!
If you do go through a foreclosure or you do have a short sale, one thing is for sure: you will be unable to get a new home loan for at least three years that is insured by FHA. Though there are some exceptions, they are few and only in dire situations. The fact is, if you do go this route, you won’t be able to get FHA insured loans later and that will hurt. More so, any time in the future that you apply for a mortgage, even well after those three years, you will need to state that you lost a home to foreclosure or to a short sale.
According to some experts, the only difference in the two in the long term is that in a short sale, you were involved in the process, or “at the table” for what happened. Whereas in a foreclosure, most home owners have little to do with the legal proceedings.
But, I’m Going To Lose My Home!
Those of you who are in rough water right now, hang tight. Contact an FHA loan advisor to find out if there are any current programs in place to help you through this difficult time. Most home owners are able to get the financial help they need. Many will find FHA loan options to keep them in their homes and to avoid all of these costly situations. You do not need to pay someone to short sell your home for you!
September 19th, 2008 at 10:49 am
I am currently doing a loan modification. To no avail our lender is horrible. Our pmt is going up and they are asking for 7000.00 to do this. I need some sound advise. We have been in our home for 7 yrs. They have placed 2 of our pmts in suspense so we were delinquint unknown to us until I started asking questions. Our lender is Saxon mortgage. It is literaly making me sick health wise just trying to keep my home for my family. Our loan was not what was disclosed to us in any way. saxon is unwilling to do anything,but the above solution which is hurting us worse. pls advise me on my options. Our credit has suffered tremendous with this situation. We are good law abiding citizens and we work hard, I need help and desparatly need sound advise. lisa Strange
October 9th, 2008 at 12:45 am
[...] The FHA Mortgage Center: Don’t allow your home to go to foreclosure or a short sale without contacting an FHA loan rep. [...]
December 12th, 2008 at 9:31 am
I have a slightly different situation. My wife and I purchased a second “investment” home in Florida. This home was a complete failure. We paid over $320,000 and now it is worth only $150,000. The builder totally ripped us off. We have good credit, but the rent income from this home does not even pay half of the expenses to keep it, even at the lowest interest rates, and the taxes are very high too. So it is costing us $1000 per month to keep something that is so far underwater that you can compare it to paying for life support on someone who is totally brain dead. We have good credit now, but is it worth it to keep throwing away $1000 per month, or risk loosing some of our credit for a few years. We have no problem paying our primary home mortgage and other bills. but is our credit going to be ruined so bad, only based on one bad item out of 15 other items on our credit report that are in perfect standing, payed on time etc. Can I compare this to getting one or even 2 F’s on a test, when all my other grades are A’s?
Please email me with any info. Thanks