Renita Gerard Website - Short Sale/Foreclosure information

If you fall behind on your mortgage, it is very common to receive telephone calls, home visits and direct mail from a foreclosure "rescue" service. Scam artists often target defendants named in public records. The scam artists usually assert that they are "foreclosure specialists" or mortgage specialists", claiming they will save your home from foreclosure for a sum of money.

Unfortunately, many people pay the scam artist, but find out months later that the company has done nothing to stop the foreclosure, and the house is set to be sold at a sheriff's sale. Don't let this happen to you"

Watch out for handwritten notes that refer to the details.

Equity skimming: A "buyer" approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest that you move out quickly and deed the property to him or her. The "buyer" then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose. Remember, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

Phantom help: The "rescuer" charges outrageous fees for simple phone calls or paperwork that you could easily do, none of which results in saving the home. This predatory scams give you a false hope and prevents you from seeking qualified help.

The bailout: In this scam, you are deceived into signing over title with the belief that you will be able to remain in the house as a renter and eventually buy it back over time. The terms of these scams are so burdensome that the buy-back becomes impossible, you lose possession, and the "rescuer" walks off with most or all the equity.

The bait-and-switch: In this scam, you think you are signing documents to bring the mortgage current, but instead you are actually surrendering your ownership. You usually won't realize that been scammed until you're evicted.

Types of Credit Repair Scams

Getting a new Social Security number: Individuals are only permitted to have one Social Security number. It is against the law to use a different Social Security number to create a false identify.

Getting Federal Employer Identification Number (EIN or FEIN): Proponents of this scam claim that you can obtain a federal tax ID number, as if you are a business, then receive a clean credit record under that tax ID number. It is against the law to use an EIN to set up a false identify. Further, a new credit report under an EIN will not show any credit history. It is unlikely that a creditor would regard a new business with no credit history as a good credit risk.

Challenging every negative entry on a credit hisotry: As a general rule, it is lawful for credit agencies to keep accurate records of negative entries on you credit history for up to seven years, and to keep records of any bankruptcies for up to 10 years. There are certain circumstances where truthful negative information may be reported beyond those time periods. As much as you do not like haveing negative information on your crdit report, your ability to object to inaccurate information is not meant to be a license to harass honest creditors in an effort to remove accurate negative entries.

No one can erase negative inforamtion if it's accurate. Only incorrect informatin can be removed. Accurate information stays on your record for seven years from the time it's reported (10 years for bankruptcy). Even information about bills you fell behind on but now are paid will remain on your report for these time periods.
Credit repair services can't ask for payment until they've kept their promises. Federal law also requires credit repair services to give you an explanation of your your legal rights, a detailed written contract, and three days to cancel. This applies to for-profit services -not to nonprofit organizations, financial institutions or the creditors.
You can correct mistakes on your credit report yourself. If you wre recently denied credit because of information in your credit report, you have the right to request a free copy. It doesn't cost anything to question or dispute items in your report. Follow the instructions provided by the credit bureau. The major credit bureaus are:

Equifax, 800-685-1111, www.equifax.com
Experian, 800-682-7654, www. experian.com

TransUnion, 800-916-8800, www.transunion.com

Contact all three as the information each has my vary.

Foreclosre VS. Short Sale - Homeowner Consequences

Security Clearances: Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serios misdemeanor or felony. If a client has a foreclosure and is a police officer,in the military, in the CIA, Secuirty, or any other postion that requires a security clearance in almost all caes clearance will be remoked and position will be terminated. A Short Sale on its own does not challenge most secuirty clearances.

Current Employment: Employers have the right and are actively checking the credit regularly of all employes who are in sensitive positions. A foreclosure in many cases is gound for immediate reassignment or termination. A Short sale is not reported on a credit report and is therefore not a challenge to employment.

Future Employment: Many emloyers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant canhave in most cases will challenge employment. A short sale is not reported on a credit report and is therefore not a challenge to employment.

Deficiency Judgment: In 100% of foreclosures (except in thos states where there is no deficiency) the bank has the right to pursue a deficiency judgment. In some successful short sales it is possible to convince the lender to give up the right to pursuit of a deficiency judgment against the homeowner.

Deficiency Jodgment (amount): In a foreclosure the home will have to gothrough an REO process ifit does not sell at action. In most cases this will result in a lower sales price and longer time to sale in a declising market. This will result in a higher possible deficiency judgment. In a properly managed short sale the home is sold at a price that should belose to market value and in almost all cases will be beter than an REO sale resulting in a lower deficiency.

Future Fannie Mae Loan - Primary Resident: A homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed Mortgage for a period of 5 years. A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.

Future Fannie Mae Loan - Non Primary: An investor who allows a property to got to Foreclosre is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

Future Loan with any Mortgage Company: On any future 1003 application a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" This will affect future rates

There is no similar declaration or question regarding a short sale.

Credit Score: A foreclosure may lower Score anywhere from 250 to over 300 points. Typically will affect score for over 3 years. After a short sale only late payments mortgage will show and after sale mortgage will be reported as paid or negotiated. The score may be lowered as little as 50 points if all other payments are being made. A short sale's affect can be a brief as 12 to 18 months.

Credit History: Foreclosure will remain as a public record on a person's credit history for 10 years or more. A short sale is not reported on a credit history. There is no specific reporting item for "short sale". The loan is typically reported "paid in full, settled".

Information from the Distressed Property Institute, LLC