To my students from Tuesday’s Short Sale Class at Windermere Issaquah,
As promised, here is the follow up from the March 17th Short Sale class:
The phone numbers for Fannie Mae and Freddie Mac ( to determine if a homeowner qualifies for a new refi or loan mod)
Fannie Mae
1-800-7FANNIE (8am to 8pm EST)
Freddie Mac
1-800-FREDDIE (8am to 8pm EST)
Better yet, the government just released this website with step by step instructions for homeowners on how to find out if they’re eligible.
Next question: How do the following events affect a person’s credit score:
Foreclosure: 100 to 140 points immediately, more if the homeowner had other late payments on consumer debt during this time.
Short Sale: 50 points if there were no late payments. Late mortgage payments will further effect the score.
Bankruptcy: Too many variables; no easy answer. Read this WSJ journal article.Loan Modification: We know that if the homeowner has missed payments, this will lower their score. If the homeowner has NOT missed payments the modification does not effect the score, however, since the upswing in loan mods is so new, Fair, Issac and Co (FICO) could decide to change their decision analytics formula. For a simple refresher on FICO scores, go here. Let’s think about this….If you and I were going to rent out a house to tenants and we ran a credit report on them, would we want to know that they needed a loan mod at some point in the past? I would want to know. As a landlord, that would mean this tenant presents a higher risk when compared with renters who didn’t need their credit restructured.