Short Sales for Non-Delinquent Borrowers in Florida and Across the U.S.

Starting TODAY, for the first time ever, borrowers, in Florida and across the U.S., who have never missed a mortgage payment will be able to short sell their houses if they can demonstrate a hardship, such as loss of employment or the death of a spouse.

This new rule will allow for underwater homeowners to get rid of their mortgage and also take advantage of the Mortgage Forgiveness Debt Relief Act of 2007, which is expected to expire at the end of the year.

Previously, only delinquent borrowers have been eligible for short sales.

There is a downside. The average person suffers a 150 point credit score loss after a short sale. This will be no different for non-delinquent homeowners because there is no special coding that differentiates them from those who went months without paying their mortgages.

Photo courtesy of stockfreeimages.comThe Federal Housing Finance Agency (FHFA) is currently in discussions with the credit industry to determine if and how this new law will affect credit scoring, but no solution has been found as of yet.

If you are considering a short sale, you should consult an attorney to discuss your options. There are many things changing in the housing market, and it is important to have all of the facts before making a decision.

Source: Inman News

Things Will Change: the CoreScore Credit Report

A credit score is a number that is generated to an individual to predict the risk associated with that person. This risk predicts how delinquent one will be in meeting their credit obligations. The credit score is generated from a variety of sources: payment history, amounts owed, length of credit history, new credit and types of credit used.

Although there are three main providers for a credit score (Experian, TransUnion, Equifax), CoreLogic is announcing a new credit score service in the real estate world. It will not act as a replacement but rather an aid to the already existing credit reports. CoreScore will deliver important insight into unseen risk and opportunities. CoreScore will act as a gap filler for the reports, providing a much more detailed report of a buyer’s information such as:

• Properties owned (with and without debt obligations)
• Mortgage obligations with companies that may not report to traditional credit reporting agencies
• Property legal filings, such as notices of default
• Property tax amounts and payment status
• Estimated market values on all U.S. properties owned
• Rental applications and evictions
• Inquiries and charge-offs from payday and online lenders
• Consumer-specific bankruptcies, liens, judgments and child support obligations

Because of the details provided in the CoreScore report, it should be essential to at least try to improve your credit score. There are several ways to do this:

1. Always review your credit report and correct errors you find. Wrong data can substantially hurt an individual’s score.
2. Reduce the balance on your balances on credit cards to 75% or less of your available credit.
3. Pay your bills on time. Although this would take time, you will see a slow and steady improvement on your credit score.
4. Reduce the amount of debt you owe. This is obviously a lot easier said than done. You need to top using your credit cards so that you can develop a payment plan. Also, consolidating your debts will reduce the amount of debt you owe even if it’s just a little.