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Are you thinking of financing a home this year? Have you been through a short sale? Pay close attention to your credit report; it can make or break your new mortgage. Lenders are required to accurately report the true circumstances surrounding a delinquency. Normally for a short sale, your credit report will read “settled for less than full balance.” Typically your new lender will want to see this versus a foreclosure on your report. Although the lender is required to report accurately, that doesn’t mean they always do. They may report “settled for less than full balance, chapter 9.” This would indicate a foreclosure as would any mention of chapters 5 or 8 as well. Having a foreclosure on your report can make it very difficult for you to get a mortgage as you otherwise would two years after a short sale. Are you out of luck at that point? Maybe not-here are some ways to challenge those marks on your credit report:
1. Write to the creditor.
2. Send a copy of the final settlement statement indicating that your previous property was in fact a short sale and also include a copy of the grant deed transferring the property from you to the buyer.
3. Let the creditor know that there is an error on your report (chapters 5, 8, or 9) and that it must be removed in order to indicate the short sale.
4.Wait for a confirmation letter which may take about 60 days to receive.
5.Re-apply for the new mortgage.