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Quick Tips for San Diego Homeowners on Short Sales and Your Credit

Quick Tips for San Diego Homeowners on Short Sales and Your Credit

One of the most frequent questions that homeowners want to know is what happens to their credit score as the result of a short-sale. Here are a few points to remember.

1) When you negotiate a short-sale, the homeowner may still owe the difference between the mortgage balance and the discounted sales price. This amount can still be collected via a “Deficiency Judgement” If granted, this judgement may adversely affect the homeowners and their credit report (not unlike other judgements).

2) The best way to avoid the deficiency judgement is to ask the bank to agree to accept “Payment in full without pursuit of any deficiency judgement.”

3) Remember that the difference between the mortgage balance and the short sale may be declared as income on their tax return by means of a “1099.”

In dealing with any short sale, the homeowner should always speak with their accountant and/ or attorney to see how this sale will affect them.

content courtesy of Brian Olenik, Corinthian Title.

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PAM PARTON 760-580-1615                           JOANNA WOOLLEY 760-580-1630