There is something that the readers of the Broken Credit Blog will learn today that hasn’t been posted anywhere on the internet. Of course, once it’s posted by yours truly it will then become fodder for so-called pseudo credit experts to post on their blogs but I say so be it! The accurate, correct, credit reporting information is what is most important – accurate, correct, credit reporting – now there’s an oxymoron!
OK, enough with the suspense. There’s been a change to non-GSE HAFA short sales that went into effect this month. Quoting from HAFA Supplemental Directive 12-02 (page 19):
The requirements in Section 11.2, Chapter IV of the Handbook related to credit bureau reporting of HAFA transactions are amended as follows:
If the real estate is sold for les than the full balance owed and the deficiency balance is forgiven, report the following Base Segment fields as specified:
Account Status Code = 13 (Paid or closed account/zero balance) or 65 (Account paid in full/a foreclosure was started), as applicable.
Do you know what that means Broken Credit Bloggers? That means that a short sale under HAFA guideleines for non-GSE loans is required to appear on a credit report the same as a full sale. Did you do a short sale they will ask in the future? Shhhhhh! We’ll keep it a secret.
This has been a public service announcement from the Broken Credit Blog.
We now return to our previously scheduled programming.