Laserfiche WebLink
Format Dynamics :: C1eanPrint :: http://www.startribune.com/lifestyle/yourmoney/95141... <br />Page 1 of 3 <br />~~ ~ <br />I ~ _ F'~~int ~CUr <br />++~~ ~. ., rn~ ttlc tu, vier tv <br />~ `tp ;: tar'rit uri ant <br />~~1 ~~~ <br />Troy Oxford, McClatchy Tribune <br />Stuck in a house you can't afford or can't sell <br />for more than you owe on it? <br />.Beware the Web, where you'll see plenty of <br />claims that short sales will save your credit, <br />simple as that. But there's nothing simple <br />about deciding whether to sell your house in <br />a foreclosure or in a short sale, which. means <br />you sell the property for less than you owe <br />the bank. And in most cases, going through. <br />either process will wreck your credit score. <br />"Both short sales and foreclosures are <br />considered negative by the score, because <br />our data shows us it's very predictive of <br />future credit risk," Tom Quinn, Minneapolis- <br />based Fair Isaac Corp.'s vice president of <br />FICO scores, said. "The claim that doing a <br />short sale is not going to hurt your score is <br />false. it's inaccurate." <br />Credit scores, which are designed to assess <br />how likely it is that consumers will uphold <br />their side of the bargain, look at the severity <br />(are we talking bankruptcy or a late car <br />payment?), frequency (have you skipped a <br />payment once, or have you missed a bunch?), <br />and recency (did. you miss a payment last <br />In both short sales and foreclosures, "you <br />made a lender eat a big number," said Alex <br />Stenback, a mortgage banker with Residential <br />Mortgage Group in Wayzata. <br />That's not to say that there aren't some <br />instances where short sales are better. If a <br />borrower is current at the point of a short <br />sale, for instance, then the consumer's credit <br />score won't sink as far as it would have if he <br />hadn't made a mortgage payment for six <br />months. Still, Fair Isaac says that the benefit <br />from. not having prior delinquencies on file <br />pales when compared with the hit a score <br />takes from a short sale. <br />Dan Williams, program. director for LSS <br />Financial Counseling Service, says this <br />widespread notion that short sales are better <br />for credit is a big problem because it deters <br />some people from going into foreclosure <br />when. that would be the best option for them. <br />In Minnesota, homeowners can stay in their <br />houses for six months after the foreclosure <br />sheriff s sale. Factor in the fact that many <br />banks don't start foreclosure proceedings <br />right after the third. missed payment, and <br />families can potentially stay in a house for <br />gtlvemsemen[ <br />~~~ ~ ~ .. _ ~#" ~ GAT' t~,t'11r,~ ~~"~' <br />~.~ <br />'~'~°?~` ,,r.~~.t= pct+rntt~crd ocJrrocl onr~rm sticfc~ke.com <br />~.I <br />«.. ~`' .~:~. , 6ct„n{i.c 4Glvs31 Yk9 }.".. tP.-~,4+.~u9i~.lk2~st~ Y4 ~y~~'a"':~Tt_~ <br />'1,';.i <br />.6~Yr <br />1 /14/2011 <br />http://www.startribune.com/templates/fdcp? 1295023131715 <br />