Does a short-sale of real estate equate to a foreclosure?
We sold our house in 2011 during the real estate crisis (and gov't bailout). We successfully sold our residence via a short-sale; HUD-1 to document it. It was not a foreclosure. On our credit report lists it as a "Foreclosure, Collateral Sold". Is this standard procedure? If not, is it grounds for a dispute?
Thu May 02, 2013 5:10 am
littleroc02us Moderator
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Re: Does a short-sale of real estate equate to a foreclosure
quote:Originally posted by Gilderod55 We sold our house in 2011 during the real estate crisis (and gov't bailout). We successfully sold our residence via a short-sale; HUD-1 to document it. It was not a foreclosure. On our credit report lists it as a "Foreclosure, Collateral Sold". Is this standard procedure? If not, is it grounds for a dispute?
I've read horror stories about this type of problem. Some lenders will list a short sale as a foreclosure, some will list it as paid in full, some will list it as a short sale. From what I've seen is that you may want to write your lender a request letter to alter their submissions to the credit bureau's and if that doesn't work try writing to the 3 credit bureau's and if that doesn't work then get the Chamber of Commerce involved.
I'd be interested in knowing, how much did this effect your credit score?
Risk comes from not knowing what you're doing. (Warren Buffet)
Thu May 02, 2013 2:24 pm
coaster Senior Advisor
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Re: Does a short-sale of real estate equate to a foreclosure
quote:Originally posted by littleroc02us I'd be interested in knowing, how much did this effect your credit score?
Ya, me too.
A short sale is definitely not a foreclosure, according to the legal definition of foreclosure. After that, though, it depends on the terms of the short sale agreement and the laws of your state. At the very least, your bank should alter their report to accurately represent the terms of your agreement.
But, if it was me, I think I would file a dispute regardless of what the bank says they will do, so you get your side represented. There is a formal process for disputing an item on your credit report. Be sure you do it the way they (ie each credit bureau) want it done. Check each of the bureaus' web sites to follow their dispute procedure, document your case well, and don't forget to send it certified mail.
Good luck!!
~Tim~
Thu May 02, 2013 3:23 pm
Gilderod55 New Poster
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Does a short-sale of real estate equate to a foreclosure?
To answer the question of does it effect our credit, the answer is yes. It is displayed prominently if a lender (or realtor, landlord, etc.) reviews the credit report.
To make matters worse, when one has a security clearance, a foreclosure must always be explained...even if it is incorrect. Never a good thing.
Thank you for your advice. I will now begin the long arduous journey to get it corrected.
Will keep all posted, since this appears to be a gray area that needs to be addressed.
Fri May 03, 2013 1:50 am
coaster Senior Advisor
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Yes, thank you!! please let us know how you make out, and what you did that worked for you. It may help others in the same boat.
