CNN Money released an article today that featured the credit implications of preventing foreclosure with a short sale. Gerri Willis, Money magazine contributing writer, wrote:

1. Stop Foreclosure with a Short Sale
Credit Implications of a Short Sale
CNN Money released an article today that featured the credit implications of preventing foreclosure with a short sale.
Gerri Willis, Money magazine contributing writer, wrote:
A short sale, in which you negotiate with the bank to sell your home for less than you owe on
your mortgage, will have a dramatically negative affect on your credit. A consumer who has
been through a short sale could see a drop in her credit score of up to 200 points, essentially the
same decrease as if the homeowner had gone into foreclosure, says John Ulzheimer, president
of consumer education for Credit.com. And like a foreclosure, the negative mark will pull down
the score for seven years.
That said, if you're underwater on your mortgage and you need to move, a short sale is a better
option than foreclosure. Going through foreclosure will make it very difficult for you to get a loan
for at least three to five years; if you've done a short sale, you may be able to qualify for a new
mortgage within two years.
If you are facing foreclosure, don’t give up hope yet. There are still some alternatives that can help you avoid fore-
closure, including the option of a short sale.
A short sale is where the bank allows the homeowner to sell their house for less than what remains on the mortgage.
The homeowner is not responsible for paying the difference, and this option is much easier on your credit score than
a bank auction or lieu in deed.
The problem is there are too few ethical, and financially sound short sale negotiation companies out in today’s mar-
ket, and too many scam artists. “Unfortunately, there are scammers who are more than happy to take advantage of
someone who is in need of help. If you are upside down in your mortgage and are considering a short sale, do a bit
of research before settling on a representative. This will save you from the potential of making a difficult situation
disastrous.” says a representative from www.sellhomeowner.com, a short sale specialist company that helps stop
foreclosure in Portland, Oregon.
To help you identify the qualifications of your seller, here are 4 things that you must look for in your short-sale part-
ner.
• The company does not charge fees. The only companies that charge fees to the seller are scam artists
who want to take your money and run. These companies ask for a fee, because they want a “guarantee” that
they will make a money off of your account, regardless of whether or not your home sells. True short sale
companies will not charge you a fee for your business, and instead work off of a commission structure based
on their sales. This means that they do not get paid unless they obtain a successful short sale of your home.
• Look for a company that pays its employees with a percentage of your sale. This means that the
employees are going to work as hard as possible to get you the best price. How long have you been working
with short sales or foreclosure prevention? If the answer is a short time, this can indicate someone who has
recently joined this market in order to make a quick profit.
• Make sure the company has licensed and bonded mortgage brokers on staff. If a company does not
have licensed professionals on their staff waiting to help you, then you are most likely involved with a scam.
Remember, if you want to get the best possible price for your home, you need to work with someone who has
proven experience and strong relationships with lenders.
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2. • Check to confirm that lawyers, not simply sales professionals, review all contracts. Lawyers’ are the
only qualified party to review these complex contracts, and they can prevent you from making several critical
errors.
Lastly, remember, if you are stuck in a house you can’t afford, there are thousands of people just like you. Don’t let
shame or embarrassment keep you from taking steps to prevent foreclosure. Find a solid company to represent you
and move forward. All of the guidelines above were provided by SellHomeOwner. For additional more information
on short sales or preventing foreclosure, visit http://www.sellhomeowner.com.
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