I have a question regarding a property that I own. Both my 1st and 2nd mortgage lenders approved short sale. Short sale was approved on 7/15/09 and my 1st lender put a condition that I have to close the sale by 8/31/09. I am on my way to close it before the said date. However, I am concerned about whether I have to pay mortgage for the month of August, which is due on 8/1/09.
During my short sale process I was current with my payments. I have heard that it is really missed payments that hurt my credit, not the short sale itself. So, missing my this last payment will hurt my credit score any further than what short-sale would do? Is this payment of $2200 worth what it could help with my credit score?
I think that it is possible that if you pay the last payment it may help your credit score because you will have no late payments on the loan but when the short sale is closed the mortgage trade line should still move to the delinquent part of your credit report reading the loan was paid as agreed or debt settled. That will affect your credit big time. As far as the 1 missed payment…it probably depends on how the mortgage company reports it to the credit bureaus.
i say - who cares about your credit at this point. the ss is going to hurt it - period.
MOST IMPORTANTLY - make sure your DELINQUENCY is negotiated to zero.
if this isn’t an investment property - then don’t worry about the IRS - your’e forgiven on the delinquency - for your tax purposes…if investment - well you’re going to owe the man money.
in terms of the banks being able to come after you for what’s left over…now that’s important. make sure they can’t - make sure in the deal it’s specifically sites that you’re in the clear and the banks can’t come after you for the difference. OR - negotiate a smaller amount - sign promissary notes and be done with it - pay the notes for like 6 months and then offer them a cash settlement to clear it.