How does a short sale affect the sellers credit?
The owner’s credit score could be affected by 100 – 180 points because of missed mortgage payments – In most situations there can’t be a short sale if the homeowner is current on his loan. The homeowner has to have the banks ‘ok’ to pay back less than what is owed on the home. The lenders may report a ‘settled for less than full balance’, ‘paid in full’ or ‘Offer and Compromise’ to the credit bureaus. Once the short sale is approved, the homeowner will avoid foreclosure (which can devastate your credit for up to 7 years!
