How will a short sale orr deed in lieu of foreclosure affect my credit and should I stop making payments during the process?

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How will a short sale orr deed in lieu of foreclosure affect my credit and should I stop making payments during the process?

I am active duty Navy and I have been losing a lot of money on my home since I have been transfered away. I have applied for a hardship deed in lieu of foreclsoure. I am currently and will remain current on all payments.

Asked on June 26, 2012 under Real Estate Law, Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

A short sale where you sell your home for less than is owing on the loan will result in a negative reference on your credit report but not as bad of a reference as a foreclosure. A deed in lieu of foreclosure in and of itself so long as payments on the loan have not been missed ordinarily will not damage one's credit rating.

However, different reporting agencies have different reporting criterias with respect to the matters you have written about.


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