Estoppel My Reporting

Hello Paul! 

Finding someone to answer this question has me thinking maybe I should just bang my head up against a wall for a while.  I just might get more accomplished. 

I have a question regarding a short sale that seems simple enough but no one (all three credit agencies and my bank) can give me a straight answer. 

I short sold a home in 2008.  I was short by 82,000, which my bank wrote off and issued a 1099 for. 

My question is this…why are they still reporting a balance owed and late payment history?  If you could tell me, or direct me to someone that can answer this I would be extremely grateful. 

Thank you,
Stephanie

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Hi Stephanie,

Take a look at your estoppel letter.  Does it make a reference to the credit reporting?   If it does, then you have your answer.  If it doesn’t (and most don’t) then you need to read between the lines as follows:

If for example it states ‘full release of liability’ then it should generally report as ‘settled for lesser than amount’ and a zero balance and there should be no late payments after closing.

Or if for example it was a ‘lien release only’ then it might be accurate to continue to list a balance and late payments.

I wish more sellers would read the Broken Credit Blog and more real estate agents would Estoppel The Insanity.  Also, read: My HELOC Follows Me

Thanks for the questions and hope this helps.

Paul