Short Sale A Million

Wow, am I glad I found your site. I live in Southern California and am thinking about short selling my one bedroom co-op condo. I bought the place before I was married and had a baby. My husband’s name is not on any of the paperwork. Technically, we are not in distress since we have never been late, have money in the bank (about $7K), have a decent APR but want to move since our daughter is getting a little old to share a bedroom with us.

I bought the property in 2006 for $222K. I currently owe $150K on the mortgage and another $23K on a HELOC with the same lender from Pennsylvania. A similar unit in my building recently sold for $150K.  I think we will be close to covering the mortgage amount but would be completely short on the HELOC.  Do you think the bank will accept this short sale and would we be able to buy another property? We wanted to buy a house with an FHA loan right afterwards.

Also, if the bank does accept the offer what would be the best way to have it reported on my credit report.

THANKS A MILLION!

Rebecca

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Hi Rebecca,

If you short sell then you won’t be able to qualify for an FHA right away.  Your best bet might be to short sell and then rent a single family home.

The best way to have a short sale report on credit is for it to not report at all.  The next best would be to report as ‘settled’ with a zero balance.  Any incorrect reporting should be disputed under the FCRA and also with a Qualified Written Request if within a year of sale.

Thanks for the questions and sorry I don’t think my answer was worth a million this time.

Paul