I read somewhere that it may be illegal for the seller and buyer of a short sale to be blood-related. The mortgage bank won’t allow this. However, if the tenant (who is not a relative) wants to buy it, would this be permissible? This is in Jersey City, New Jersey.

(copyrighted)

After twelve years of credit repair, credit score repair and writing credit repair letters to all sorts of creditors, collection agencies and credit bureaus, I realized that it was necessary to provide my services at a serious discount to consumers in need. I realized that not all consumers could afford my credit repair services. As a result, I created a hot line to answer credit repair and credit score questions. However, I noticed that it was becoming an overwhelming task for my staff and at much expense in order to provide the free credit repair services.

A little over two (2) years ago, a couple of my clients suggested I should write a booklet (20 pages) about credit score, how credit score is calculated, what to look for when calculating credit score, what is the best way to repair credit and some of the main topics of credit repair. They suggested I should provide this ebook for a price of $9.95. I thought about doing so for some time as I was thinking that 20 pages of credit repair ebook would not be enough to even touch the surface on so many subjects that needed to be covered. You see the entire idea of credit repair (credit score repair) or credit repair letter writing is not a simple task that even 50 pages would be enough. However, it was also bothering me to charge $9.95 for some limited number of pages.

Then I realized, I could sit and think and continue contemplating about writing a credit repair - fix credit summary pages until I turn blue, or if I truly want to help consumers with their credit repair and credit score issues, I must take a step and start now. That was two (2) years ago.

As I was writing, in August 2006, I realized, we’ll have a major problems with the mortgage loans being granted so easily due to the unethical practices of mortgage lenders, brokers and direct lenders. You must understand this point. For the past eleven (11) years, I was directly involved in assisting my clients get loans after their credit repair was reasonably completed and their credit score was around 740 or higher. Initially, I was just fixing credit and let them enjoy the luxury of such good credit score. However, after communicating with my clients a couple of months later, I noticed that they were getting rubbed by “mortgage brokers” and the so called “Direct Lenders” or even the loan servicing companies. It was unjust then and it continued to be unjust now. Since this is a separate issue of its own, that I must share it with you and teaches you what to watch-out for, I am going to create a separate article about Creditors, lenders, mortgage brokers and the “direct lenders.”

Let’s stick with issue regarding credit repair.

Most consumers fall in the trap of over extended credit when banks and credit cards companies offer one card or loan after another. The consumers think the best way to get-out-of debt is borrowing more. In other words, “steal from Pete to pay Paul.” This is one of the major misconception consumers have that puts them in a deeper debt and causes even more problems for them to the point that they have credit collapse (beyond credit crunch). They experience receiving a lot of called from collection agencies, having late payments, collections and charge off entries on their credit files (credit reports) and their credit score goes down to 400 or 500 level.

As I was typing my so-called ebook (according to push my clients given), I noticed that the summary book was expanding to over one hundred pages and I was not even touching half the issues. Then I decided to continue and make the book a “credit repair” book called “Your Credit = Your Life, Fix It Now!” Since August 2006 realization that we will have mortgage problems, my only option was to inform as many people as I could either by emailing or calling, I was not able to reach all consumers. However, “Your Credit = Your Life…” book addressed all issues.

Other misconceptions consumers have, is the fact that some of them think, a credit repair is a quick fix. They think, they can just wave a magic wand and their credit score will go up from 495 to 720 or more. That’s not how it works. A true credit repair or improvement in credit score takes time (several months to a couple of years). Don’t be fooled by what you hear as quick “credit repair fix.”

In order for you to do self credit repair which is the best method, your must follow several steps. Those steps are lengthy and require patience. It requires dedication, willpower and application of your own gradual experiences. For the past several years, I have a sign on my office door so that everyone can clearly see. I also have the quote on my business cards, letterhead, books I wrote and talk about it repeatedly. It says, “more is lost by indecision than by bad decision.”

Think about it for a couple of second and then relate these words to what has transpired in your life thus far. Just as I was contemplating to write 20 pages for an ebook and sell it for $9.95, I was thinking of two things:

a. It is not possible to write just 20 pages,

b. I wouldn’t have the heart to sell a summary book for $9.95.

I lost the track of my own quote. “More was being lost be my indecision…” I wanted to help teach others how to fix credit; I hired a staff teaching them the credit repair concepts, but wasn’t grabbing my keyboard to type what was in my heart and mind. As my clients were pushing me, I was lost in my indecision.

Most consumers do exactly the same as I did for a couple of months. Think with yourself. How many times were you planning to do something and you kept contemplating if you should do what was in your mind or suggested to you? I bet you did that a few times. I bet part of your problem was the same as mine. Where do I start? How do I approach it? What would be my next step? And, a long list of other questions. You know something. Unless you take the first step, you wouldn’t know what the next step is. Unless you set your goal, mind and heart to take an action, it will never happen. You will contemplate and continue in your indecision yet time passes you by and all you do get deeper and deeper in debt, pay more for simple loans, get drowned in debt to a point that you will take your credit or financial anger on your loved ones. ALL BECAUSE YOU DID NOT MAKE YOUR DECISION IN DOING SOMETHING TO TURN YOUR LIFE AROUND.

My dear friend, stop feeling sorry. Here, I am pushing you to do something. Make a decision and do something about it NOW. It is never a bad idea to have a better credit so that you could have a better life and save more money. It took me several months to prepare the book that offers all you need to know about your credit. Believe me, I have seen so many credit reports that yours would not be half as bad as what I’ve seen. There is hope for everyone, especially you. You only become hopeless when you don’t get up, shack off feeling sorry and do something to turn your credit life around.

Please let it be now. Here are a few steps in what you can do.

1. Get copies of your credit reports. You must obtain recent copies for all three (3) credit bureaus. One credit report won’t do. Why? Different creditors and collection agencies report to different credit bureaus. See the book.

2. Compare each entry shown on your credit reports with the account statements you have. Whether it is an open account, closed account, a collection, a charge off or late payment account. You don’t know how many times, I seen credit reports where the consumer did not have any such account and it was creditor or credit bureaus mistakes. Read the book.

3. When you notice inconsistencies (whether it is an account you don’t recognize or misinformation about an account), call creditors and credit bureaus. Discuss, dispute and be persistent.

4. Ask for a conclusion, removal or correction letter.

5. Do NOT settle with collection agencies. If you do or have no other choice, you must do two things, settle for less or don’t pay unless they agree to correct the entry by removing it.

6. Do not trust a collection agent. They do NOT mean well.

There are so many things to talk about and so many techniques to offer. It is impossible to discuss all in this article. So, I ask you to do something useful and quick to improve your credit score, which is as a result of your steps in your credit repair. You don’t know how good it will do for you.

For a complete details of the list above and other topics use the knowledge base provided at link and pick up a copy of the book “Your Credit = Your Life, Fix It now!”

Best wishes

Mike Samadi

Any questions?  Go to Q & A of www.MasterCreditRepair.net, read and post.  Go to the “Comment” page and post your story or comment.

Credit Repair Done Right

If you want your credit repair effort to succeed you need the right credit scores and credit reports. The wrong approach can put you on the path to lower credit scores and frustration. The information you are about to read may shock and amaze you. But if you do it right you will have a great advantage and avoid some serious frustration.

The Scores You Need

Do you know what your credit scores are? Are you sure? If you are going to begin a credit repair effort and want to benchmark your starting point you should do it right. Here’s the problem. The credit scores sold by the credit bureaus are not the same scores lenders use. Huh? That’s right; the credit bureaus created their own credit scores to cash in on the market opportunity. If you muddle through the fine print at the credit bureau websites you will discover the disclaimer.

Avoid Those Imitation Scores

This unfortunate fact applies to the army of credit resellers on the web as well. There is another problem with bureau scores. You may think that even an imitation score will serve your credit repair purposes, believing that your progress should be reflected in some way. I’m sorry to say that these scores do not behave the same as your real lender scores and are almost sure to result in disappointment.

MyFICO, the Right Score for Credit Repair



If you want your real scores you have to go to MyFICO.com the website of Fair Isaac Corp, the creator of the FICO score. The current cost of scores is about $50 for all three combined. A bit pricy, but it’s the only game in town. And for those intrepid credit repair warriors that want more detail, Equifax does in fact sell a FICO score. Unfortunately, they only make it available for your Equifax report, and you definitely want all three scores for your credit repair effort. Also, they use an older release of the formula, so the results will vary.

But Nix on their Credit Reports



So, head on over to MyFICO and get your scores right from the source. It’s the right credit repair choice. But there is another twist. Although MyFICO is the only way to get your scores, the credit reports they provide are the pits. For some strange reason MyFICO blocks out virtually all of the account numbers and offers only about half of the information that your credit repair effort will need. So get your wallet out again because you will have to buy your reports elsewhere. It takes few bucks to get your credit repair underway, but it’s worth doing it right.

The Right Reports



Although the credit bureaus peddle poor credit score products, they offer excellent tri-merged reports, full of all of the detail you need for your credit repair project, and when it comes to credit repair every detail matters. I’ve taken you down a twisty road so far, and I’m sorry to say that there is one more twist on this journey before we arrive at our goal.

Credit Repair and the Right Deal



Here is the final twist. The credit bureaus want to sign you up for monthly membership, hence the offers of free credit reports in exchange for joining this or that service. If you are not careful your free credit report will end up costing you hundreds of dollars. If you want to join a monthly service, that’s another story. There are benefits. But if you just want to get your credit repair underway and want a good cheap tri-merged report you have to look very carefully.

Hiding in Plain Sight

TrueCredit.com offers the best cheap one shot tri-merged report on the web. But it’s not easy to find, so don’t just run off to TrueCredit and think you’re going to find it clearly advertised. In fact, it’s about the last thing that they want you to buy. But it’s there, hiding in plain sight. Well, almost. Scroll down the home page. Look under the main picture for small print in light gray that says that coverage is not available for residents of New York.

Credit Repair Treasure Hunt Success

Right under that line you will find another line that says that you can also get your 3-bureau credit report without the free score. Click on the words, without the free score. It’s a credit repair treasure hunt. How hard can they make it? Wow. Make sure to uncheck the two boxes where they try to sell you two other ridiculous items that have no use for your life, not to mention your credit repair efforts. Now you have the tools you need to get started. Good luck!

Copyright © 2008 Ian Webber. All Content. All Rights Reserved.

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FICO scores are formulated using a complex algorithm that factors in many elements of your credit history. You FICO score is a snap shot of your credit standing and is based off of your credit report. There are five main elements of your FICO score that each has a different weight: payment history 35%, how you owe 30%, credit history 15%, applications for credit 10%, and credit mix 10%. Besides your payment history, how much you owe is one factor that keeps consumers from getting a good FICO score.

Why is how much owe have such a large weight in a FICO score? It reasoning is based on the high default rate of consumers that are near their limit in credit. Consumers that are near the limit have little room for error. Things like an interest rate hike or loss of a job can cause consumers to default. Also, it is a sign of lack of control in ones finances and if struggling here it could be one of many other problems in a person’s finance.

One term is usually used when discussing how much you owe in calculating your FICO score, “utilization.” This is the difference between how much you owe on your accounts and the total credit limit. Utilization is actually a ratio mathematically stated as how much you owe divided by the credit limit. This is done on an account by account basis as well as an over all rating. The rule of thumb is the lower the utilization the better.

There are more complex aspects of how much you weighted into your FICO score. The first is the fact that is done on an account by account basis. It is better to have you utilization spread among several different cards compare to just one. So if you have a credit card that is close to the limit and several that have zero balance, this could hurt your score. This is often the case when consumers are doing balance transfers to pay off a high rate card.

The second point to consider is if you close account with zero balances you could hurt your FICO score. Since your utilization is also figured as a sum of all your accounts, closing accounts will hurt your total amount of credit. Since you divide how much you owe by your total credit limit, lowering your total credit will make your utilization rise.

 

As you decide to pay down debt to lower you utilization you might find that your will find your FICO score will not improve over night. This is because after paying off a balance it must be reported to the credit bureaus and then added to your credit report. This will take time and you will just have to wait. The moral is paying down how much you owe is one of the most difficult and influential actions you can do to improve your FICO score.

 

I have a bunch of hospital bills that really cost me in credit scores. I really want to try to consolidate it but I can’t find anyone who does debt consolidation without credit card debt. Any suggestions?

Many of the homes on the market today, and homes going into foreclosure are not worth what they have outstanding loans for. Now we have an expected 1 in 500 homes (national average)expected to go into foreclosure due to adjustable rate mortgages in the next year. How do you sell a home for less than you owe?

Short Sales! While we have purchased homes via a short sale, I would not recommend it. It was a very long drawn out process each time and consumed weeks of time and a flurry of faxes, conversations and numerous voice mails.

I found National Short Sale Center, Inc. a national company which assists homeowners and mortgage services on a nationwide basis in negotiating down the amount owed on a home loan. It creates a win-win situation for both parties by providing the homeowner an option before their property is foreclosed upon, and by achieving maximum yield for the servicer.

National Short Sale Center has been the national leader in conducting short sales since 2004. This is a result of our commitment to the homeowner and conducting each negotiation with excellence. We are effective because many of our employees have worked in the lender’s loss mitigation departments and have been trained in short sales as their specialty.

They list the following success stories on their website:

1. Negotiated a 2nd lien owed $63,000 to $2,000

2. Negotiated a 2nd lien owed $212,000 to $5,000

3. Negotiated a 1st lien owed $107,000 to $71,000

4. Successfully negotiated the complete removal of an IRS lien for approximately $25,000

If you are a homeowner, lender or realtor, it might be in your interest to contact them if you or a client owes more on their home than it is worth. I was not able to find any negative information on them and they are a member of the BBB (Better Business Bureau).

We have tried to sell our house and cant even get out of it at all. The market sucks and we just cant afford the payment anymore. Does anyone know what affects your credit less? A deed in lieu of forclosure? A forclosure? Im just wondering if either one looks better on your credit report or if it doesnt matter.

Didn’t he speak against the practice of offering interest only loans?

A little over 5 years ago, I remember making a trip out to Brooklyn Polytech Institute to offer faculty and staff there a free credit and debt counseling seminar.  At that time, I was representing a public non-profit consumer credit counseling agency I co-founded back in 1996, and these free seminars were a significant part of maintaining compliance with the IRS.  They were free to all attendees, and free to the organization, agency or company hosting.   Back in 02 and 03, consumer credit counseling was under increased scrutiny and growing suspicion due in large part to the bankruptcy filing of Ameridebt, the nation’s largest consumer credit counseling agency.  Ameridebt had been caught mismanaging funds and misrepresenting themselves to the public, calling all non profit credit counseling into question.  As time went on, more agencies were coming under investigation for funneling profits to for-profit entities and misrepresenting their services to the public. As a 34yr old, still holding on to his last shreds of idealism, I remember thinking aloud on that September day I took the R train out to Brooklyn that “nothing was sacred anymore,… nothing.”

 

As a small non profit who couldn’t afford mass advertising on TV or radio, we had availed ourselves to speaking engagements and word of mouth referrals as far back as the late 1990’s, as our primary source of advertising.   The seminar route was nothing new to us.  Since the late nineties we had spoken for free to Church groups and urban development leagues throughout the five boroughs.  And by 2002 and 2003, we had extended ourselves to various EAP programs throughout the city of New York in hopes of building a client base and possibly educating a few people as to the inherent dangers of credit card debt, predatory lending and how to properly manage money for unconventional real estate purchases. 

 

As usual, I was armed with an arsenal of educational information from the American Center for Credit Information, HUD, and Fannie Mae.  The load included several little workbooks designed to assist potential first time homebuyers in decision making.  I think one title, “Knowing When the Time is Right for You,” read like a teenage dating guide.  The others, like the “Basics of Budgeting,” and “Money in Motion” also had their distinctly perverse dummied up definitions of fundamental money terminology.  But that’s not to say they were devoid of any worthy educational merit. I knew however, drawing on previous experience that the majority, if not all, of these books would never see the light of day.  What most people turned up to these seminars for was to learn the secrets of credit repair using the form-letter dispute format.  They also came to heat about the legally enforceable statute of limitation on bad debts, or advice on expunging an unpaid judgment.  Based on free follow up telephone counseling I’d extend to seminar attendees, I’m confident in saying that money management technique or the consequences of misunderstanding a balloon payment or adjustable rate sub prime loan were very low on the totem pole when it came to the substance of these seminars. 

 

To me, this seminar would be yet another bad example that preaching the dangers of predatory lending practices and sub-prime loans was a complete and utter waste of time.  All people wanted to hear about was how to navigate the shortcomings in the credit scoring and reporting system so they too could get a mortgage.  After all, everybody was doing it.  Mortgages were the latest fad, or addiction, depending how one looked at them.  Personally though, I was growing increasingly pissed off over the latest hypocrisy surrounding the credit and debt counseling ‘industry’ where as our beneficiaries, commercial banks and credit card companies, stipulated that our funding would be strictly contingent on our educational merit to the communities in which we serve, and not on how much money we were returning to them through our consolidation programs.  This declaration still stands out as one of the most outstanding lies I have ever heard in my life as all credit counseling and credit education was now done over the telephone and the internet.  Seminars had been replaced by chat rooms and streaming video.  And counseling now consisted of one 20 minute conversation with a certified credit counselor over the telephone who was more interested in enrolling you into a debt consolidation plan than providing any worthy information pertaining to budgeting and money management. 

 

My agency’s face to face method of counseling and education were dead and gone.  Banks and credit card companies are just as reliable as any profit driven company when it comes to putting up the facade of social responsibility.  It’s just good business, I suppose.  They really didn’t want us out there standing on ceremony preaching the inherent dangers of their products too vociferously.  And they didn’t want us out in the community blatantly undermining the subprime marketplace because of the money to be made there.  After all, as one beleaguered mortgage broker put it to me after I had warned a contingent of 300 first time homebuyers about obtaining subprime loans – “who are you to trash these people’s dreams.”  Good question I thought – who was I?

 

The best I could hope to gain on this particular day in Brooklyn, was a letter, on BPI letterhead, from the Director of the EAP program verifying my appearance on the spot.  Typically I’d wait months for such a letter, and sometimes they never came at all.  But, we still needed to show up to keep the powers that be off our backs.  It also meant yet another day away from my office not addressing the backlog of debt management proposals I needed to send to numerous credit card companies on behalf of an ever growing number of ordinary people who had fallen victim to the old American virtue of buy now and pay later.  They were ordinary people who were extended far too much credit given their annual incomes.  Ordinary people who never really learned the basics of budgeting.  Ordinary people who always believed that ‘next year will be my break out year.’  They were ordinary people who now had to pay up.   

 

It was also around this time 5 years ago where I first starting hearing the term “sub-prime mortgage” on a fairly regular basis.  I’d heard it in passing years before but the term was reserved for individuals whose credit scores were too far gone for anything conventional in the mortgage market.  Previously, sub-prime was synonymous with hard-money loans.   Suddenly, it had a newer significance as the sub-prime market, now backed by more conventional deposit institutions, was bustling in full swing, driving some mortgage specialists and lenders into a frenzy with the sea of money to be made off of extending these difficult loans to individuals with already compromised credit.  I also remember thinking to myself in no uncertain terms, one day this will cause some real problems. 

 

On numerous occasions, far too many to recall, I’d had the conversation with my dedicated, but tired business partner about the day when everyone would have to abruptly stop and entirely re-evaluate their ideals, attitudes and most importantly behavior when it came to borrowing money.  Our conversations often left us both in complete disbelief at the shortsightedness of not just of the banking community, but also of the human condition itself.  Still wrapped in the hope that one day justice would prevail, we’d remark at great length about the thoughtlessness that overtook people when the chance to make a quick buck came into play.  It appeared so academic to us that sooner or later everyone would feel a swift and severe backlash from the fury of subprime loans, and, yet again, it would be left to the innocent to clean up the mess.  To what extent the average, everyday American would be footing the bill on this, we hadn’t a clue.  We suspected however, it would be far worse than anything we had witnessed in previous years.

 

Something remotely similar did come to mind with the demise of the dot-com industry in the late nineties that culminated with the market crash back in 01.  Business in the credit and debt counseling industry did experience a sharp increase in the fall of 01 and winter of 02 as it seemed thousands of people lost jobs in New York City seemingly overnight.  Suddenly, a whole new type of debtor appeared.  One who had never been in such a position where credit cards were now used as a means of survival, rather than a convenient type of payment alternative.  A number of people we tried to assist back then with debt management plans and monthly budgets defaulted on their repayment plans.  Many declared insolvency with a chapter 7 bankruptcy as entire debts could be expunged at that time.  And par usual, the losses were simply passed on down to the timely cardholder in the form of a fee or a rate increase of some sort.

 

Our premature prediction of the subprime meltdown however, presented an entirely different kind of crisis both in scope and kind.  This would be unprecedented financial devastation and upheaval on a large scale basis.  Markets would be vulnerable to collapse around the globe.  Financial institutions, even some of the most reputable and storied, would disintegrate in an instant.  Jobs would be lost.  Retirement packages would evaporate.  People’s entire life savings would go right down the tubes.  Full on financial Armageddon would be at hand.  Back in 03 and 04, I was accused, more than once, of being overdramatic.

 

I started to become somewhat of a zealot on the subject and often had many of my family members, friends, and peers at odds with me.  Many of them would patiently watch me go off on one of my animated tangents about how one day we would all have to face this beast and it wasn’t going to be pretty, I’d stammer.  In retrospect, I believe that many of these little rants or furies were also rooted in the resentment I harbored towards the credit and debt counseling industry.  It’s true.  I hated my own.  By 2004, many of the nation’s largest consumer credit counseling agencies had their non-profit status revoked for mismanagement of their trust accounts and their ties to for profit businesses.  They had succeeded brilliantly in destroying the distinction and legitimacy I had worked so hard to achieve and refine.  I had in fact, established the only New York State Licensed, COA Accredited public non profit ever.  I worked my ass off for 8 years to achieve this merit, and I never cut corners, took favors or pocketed a single dime that didn’t belong to me.   In short, I guess I was pissed because the same greed had now penetrated my own industry exposing the hypocrisy.  But, that still didn’t mean I was wrong about what was to come.  A little insane and consumed, yes.  But wrong? 

 

   I started to watch the stock markets and lending rate fluctuations in an obsessive manner thinking that the dominos were about to start to falling any day now.  At some point, I began losing weight and sleep as the banks continued with their funding cuts and my job was now in eminent peril.  If we didn’t have a proposed merger in the works with a larger independent agency, I’d have been in receivership myself back in 2004.  Just getting a non profit credit counseling agency up to speck can set one back tens, if not hundreds, of thousands.  No mind, I figured our services would be in such demand once the rash of foreclosures came about, benefactors would be throwing money at us in order to assist in maintaining economic equilibrium.

 

But, the sub-prime lending brigade marched on seeming to only to gain momentum throughout 2005, and part of 06 as well.  Couldn’t anyone else see this for what it was?  I’d hear stories from friends about mortgage brokers who’d advise them to walk on all of their credit card debt and use the money for repayment as a down payment on a piece of property.  “Sod your cards with FUSA and MBNA, I can still get you a loan in spite of your paying history,” one of my friends was told.  And the initial rate could be refinanced in 12-24 months the pitch went on to say.  “At least you’ll own something that you can sell.”  How American I thought.

 

For whatever reason, maybe the impending doom of the inevitable crash or my own personal insolvency, I started feeling a sense of urgency with my work, especially when it came to educating the public.  I took any venue provided to voice my hostility towards what was happening.  Even students at my ‘understanding and managing your credit and debt’ class at the learning annex didn’t escape my rants.   Funding for the agency continued to decline considerably until it was almost abolished entirely save for a few loyal but insignificant patrons   In part this was due to maximizing quarterly returns for the banks that funded us, but mostly, I believe it was about snuffing out any voice that was out there preaching the evils of sub-prime lending.  The banks loved the fact that we used to assist them in collection efforts, acting as a friendly alternative to traditional collection practices offering budgeting and sound financial advice, but they clearly didn’t want us out there warning people about the dangers their products. 

 

Sadly though for me, as 2005 began to wane and merger talks with my agency were disintegrating, I began to feel my own mortality as a credit counselor more than ever.  Funding had been stripped to basic operating expenses, leaving little or no room for salary.  The work I once deemed so esteem able and necessary was worth literally nothing to anyone.  Here I was on the verge of my 37 birthday, looking back on my last 9 years of work with nothing to show personally.  No wife and kids.  I’d sacrificed that life for my cause years before.  No money stashed away as everything I ever made went back into the agency.  I was as broke as many of my clients were.  And, no real transferable job skills.  The last two years searching for work has been an exercise in futility as far as work in commercial banking or finance. 

 

I’ve tried to salvage some good I may have done.  And I suppose on some level, I did.  Every now and then I’d get a card from a former client or seminar attendee or student who had my class telling me that something I said had helped them in getting their personal finances back in order.  But I can’t shake that nagging feeling that I was never really allowed enough time or opportunity to vocalize my opinions, and coordinate real change in the form of appropriate regulation.  For if I had, perhaps none of this imminent peril would be upon us.  But then again, who was I too think I could have made any real difference anyway.  I was just a kid playing businessman in lower Manhattan.  At my agency, we’d never had any real money behind us but we were constantly challenging some of the biggest banks in the world to a public fistfight.  We’d go on record with anyone who’d listen to us about the impending disaster.  In retrospect, I was screaming at the top of my lungs for people to take notice of the sub prime credit catastrophe that would one day render us financially impotent, but no one really wanted to hear that in a time of pseudo-prosperity and growth.  “Get back in your box, creditman.  We’ll call if we need you to clean up the mess.”  Only problem now is the mess is at hand and I’m long gone…….

 

 

Are you facing a home foreclosure? Has your financial hardship landed you in a position that may cause you to lose your home? Well then, a short sale may be the answer. Selling your home by doing what is referred to as a “short sale”, by which the lender agrees to accept less then what is owed, may be just what you need to get on the road to recovery.

Short sales essentially tell the bank that you have a purchaser that has agreed to purchase you home for less then what the current outstanding mortgage balance. Lenders lose money by doing this, however the short sale is a decision that they must agree too.

Some lenders will be very open-minded to a short sale lawyer’s fess, court costs and the likelihood of a bankruptcy, on your part, in the future. Ultimately, foreclosures cost lenders tens of thousands of dollars, losses that are certainly a loss in the event that you file a bankruptcy. Eviction costs, administration and sale of your home these too are factors that lenders take into account while consider the short sale offer.

A short sale offer that is as close to the actual market value as possible will more likely be your best approach to getting the bank to consider this option. If the offer is considerably less then the market value, you will need to convince the lender that the offer on the table is in their best interest, and to move forward with the short sale of your property. Keep in mind that mortgage companies are in the business of lending, not property management.

Some ways to persuade the lender to consider the short sale are to convince them that there is a wide range of repairs required on the property, the local economy for housing and employment is in distress, or any other persuasive explanation why they should agree to the short sale.

A short sale is preferred over a foreclosure with the later; your credit will be negatively affected which will require a great deal of time and effort to repair. Short sales allow you to repair a damaged credit history faster so that you can get back in the housing market faster, once your financial position is recovered.

Short sales are a radical solution to your financial problems, however you can convince the lender that you are desperately in the rears on your payments and you have no viable way to resolve the default amount, or the future payments on the mortgage then you are a prime candidate for a short sale.

The foreclosure process is very costly, and can be very complicated. Lenders sometime would rather avoid having to complete the foreclosure process, and avoid getting the home back as an REO, otherwise known as a “Real-Estate Owned” property.