| No matter what you do, if you are in a situation | | | | the couple had to choose between paying a |
| where you are not able to pay your mortgage on | | | | mortgage on a house they no longer live in, or |
| time there will be dire consequences when it | | | | pay rent so they have a roof over their head. |
| comes to your credit. | | | | They ran through all of their options with the |
| It is unfortunate and the situation is extremely | | | | mortgage company but their lender was not willing |
| stressful, however the sooner you bring yourself | | | | to let them do a short sale or loan modification |
| to the reality of the situation, the sooner you will | | | | and they had no choice but to foreclose on their |
| be able to come to a solution with the most | | | | home. |
| minimal consequences. | | | | The above scenario is a very unique case of |
| Hector Milla Editor of the "Best Loan Modification | | | | someone who has gone through all of the options |
| Companies" website -- -- pointed out; | | | | and foreclosure was the best choice. However it |
| “…A foreclosure on your credit record will | | | | will do the most damage to your credit score. If |
| probably lower your score around 260 points. | | | | you are in this situation you should consider all of |
| That number is not definitive, however it is an | | | | your options. |
| approximate. Even if you have phenomenal credit | | | | “…Contact your mortgage company and see |
| it will lower your score to a negative number. | | | | if they will allow you to do a short sale. There is |
| There are very few situations where a | | | | some debate as to whether a short sale will |
| foreclosure would be the best option…” | | | | adversely affect your credit. Some say that as |
| Here is a scenario where a foreclosure may be | | | | long as you stay current with your mortgage |
| the best option: There was a young couple who | | | | payments during the course of the sale you it will |
| lived and owned a home in Minnesota. They | | | | not show up on your credit record. However if |
| bought their home at the end of the housing | | | | you are in a situation where you have to put the |
| boom so they paid top dollar for it. Then they | | | | house up for a short sale you may not have the |
| were transferred to California at the beginning of | | | | funds to pay full mortgage payments. Mortgage |
| the housing crisis and could not afford to sell their | | | | companies also will not grant you a short sale if |
| home as they would have to sell it for much less | | | | you cannot provide proof that a short sale is |
| than what they owed. | | | | necessary…” H. Milla added. |
| They decided to rent the house, but again | | | | Continued late payments will also adversely affect |
| because of the housing crisis they were only able | | | | your credit report dramatically. Your best course |
| to rent it for $1000 less than their monthly | | | | of action would be to talk to your Mortgage |
| mortgage payments. The husband, who was the | | | | Company As Soon As Possible and try to work |
| bread winner, worked in the banking industry and | | | | out a solution before you are deficient on your |
| was laid off a year later because the housing | | | | loan. Ask them about doing a loan modification to |
| crisis infiltrated the banking industry. At this point | | | | lower payments. |
