Thinking of Doing a Short Sale?

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3 Secrets the Bank Don’t Want You to Know About Short Sales.

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Short Sale Deception!

You have been lied to and directed into a short sale in order to line the pockets of real estate agents and to put more money in the coffers of the bank…while you get NO relief!


Foreclosures and short sales don’t just destroy your credit score today, but they also hamper the ability to stabilize your life and finances tomorrow.


What Is A Short Sale?

A “short sale” is the sale of a home for less than the amount that the owner owes the mortgage company. Short sales appear on credit reports as “settled” accounts, meaning that the lender received less than the full amount that was originally agreed upon.

How Does a Short Sale Impact Your Credit Score?

Since you didn’t repay the full debt as agreed, a short sale significantly impacts your credit score. Homeowners need to know that a short sale is BAD for your credit. Even if your payments were never late, the mortgage will remain on your credit report seven years from the date it was reported settled or paid.

However, if you are already severely delinquent on the mortgage payments, your creditworthiness is probably already badly hurt. Your goal now should be to START REBUILDING your credit…NOT to harm it further. Fair House Offer offers a program to that will help you start rebuilding your credit and its called our Mortgage Relief Program.

Realty Trac recently reported that pre-foreclosure transactions, which often include short sales, have increased substantially. Short Sales are INCREASING, however, it’s NOT because they are beneficial to the homeowner.  Homeowners have been led to believe that because foreclosure is so devastating to their credit scores, almost anything else is better.

This is NOT true — turns out there’s no significant difference in FICO score impact among foreclosures, short sales or deeds in lieu of foreclosure, said Bradley Graham, senior director of scores product management at FICO, which is the trademark credit scoring model creaFacing Foreclosure in Charlotte NCted by Fair Isaac Corp. It’s the most widely used scoring system in the country.

“All of those events represent a loan default and as such are highly predictive of future credit risk,” Graham shared.

Graham said that based on the analysis of the information that lenders share with credit bureaus about those forms of mortgage default, they have about the same weight when determining future risk.


Foreclosures and short sales don’t just ravage your credit score today, but also hamper the ability to stabilize your life and finances tomorrow.


Plan on renting after you abandon the home you own? You may have to scramble to convince a landlord that you’d make a reliable tenant — a tough sell if you’ve left your mortgage lender with hefty unpaid debt.

Employers may also check credit reports of prospective employees, particularly if the job requires overseeing or handling money.

“Someone with poor credit may not be seen as trustworthy,” says attorney Dianne Coscarelli, a partner with Thompson Hine in Cleveland who chairs the American Bar Association’s mortgage lending committee. “To an employer, they may steal money or not make as good an employee as someone without that financial baggage.”

Time is the only cure for credit damage related to a default. After seven years, a foreclosure  and short sale will be removed from a credit report.

Tax consequences

Foreclosures and short sales also may trigger a bigger tax bill, depending on the kind of home you’re leaving. The IRS views unpaid debt — including mortgages — as income. In official tax parlance, it’s known as “cancellation of indebtedness income.”

“When you don’t have to pay a debt back, you effectively have income you didn’t have originally,” says Eric Smith, IRS spokesman.


Going through a short sale is NOT in your best interest!  It may have been presented to you be a real estate agent or a person at the bank but they are MAINLY looking out for themselves and the company’s best interest!

Real estate agents rely solely on sale commissions to get paid, so they are motivated to get you to sell your house via short sale because they will still get their FULL commission regardless. Also, the bank may approve of the short sale because they get the property back and then have a chance to SELL the exact same property AGAIN and make an even bigger return on their money!

A short sale has the same drastic NEGATIVE effects as a foreclosure and it will severely damage your credit for YEARS to come.

You can avoid all of this by seeking out programs like Fair House Offer’s Mortgage Relief Program in which Fair House Offer takes over your mortgage payment. There are several benefits to this but the main one is that your house which was a liability when you were responsible for paying for it, now becomes an asset because someone else is paying for it and it looks GOOD on your credit report and debt to income ratio. Learn about our Mortgage Relief Program