Short Sale FAQ’s


Here are some of the questions we usually hear from people interested in Short Sales:

When will I be able to buy a house after a Short Sale?

  • The ability to qualify for a mortgage largely depends on your income and credit score. If you have a good credit score and income, according to lenders that we have spoken to, you should be able to qualify for a mortgage about 2-3 years after a Short Sale. Please keep in mind that lending guidelines may change, which may make it easier or harder to qualify. If you have any questions about this please contact a representative from a mortgage company and inquire about the ability to qualify for a mortgage if you have a Short Sale.

How will this effect my credit score?

  • It is impossible to quantify precisely how a Short Sale will effect one’s credit score. However, most of the time the Short Sale will be reported on your mortgage account as “Paid (or settled) for less than full amount”. This will be seen as a derogatory item on your credit, but should not be viewed as harshly as a foreclosure.

Will I have to pay any monies to my mortgage company?

  • This depends on the conditions that the lender includes on the Short Sale approval letter. In some instances (usually involving second mortgages or HELOC’s), lenders will ask for a contribution from the borrower. Other times a lender may ask for a promissory note from the borrower.

How long will this take?

  • A Short Sale can usually be completed about 3 to 4 months after an offer from a a buyer is accepted. This is an estimate and should not be taken as an absolute time frame. Some lenders process Short Sale requests more efficiently than others. At times it appears that the lenders are getting faster in processing Short Sale requests, but then some of their bad habits resurface. It is vital to remain patient through the process and keep the end goal in mind.

Should I pay my mortgage, HOA, insurance, etc. payments while I am waiting for my Short Sale to close?

  • It is usually recommended that a homeowner keep current on the HOA, insurance and property taxes. The decision on whether to pay the mortgage payment is not as easy. Usually, a lender will consider a Short Sale if a borrower is having trouble making their mortgage payments. If you are making the payments, then some lenders may not consider your Short Sale request since you are able to pay your mortgage payments. Conversely, missing payments will damage your credit score, and many people want to try to maintain as good as a credit score as possible. In the end the borrower must usually decide which is more important, increasing the likelihood of getting the Short Sale approved or trying to preserve their credit score.

Will I have any tax issues or problems because of a short sale?

  • According to the IRS, a debt owed to someone else and that is cancelled or forgiven may be taxable, this is commonly referred to as “forgiveness of debt income”. However, the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude “forgiveness of debt income” from the discharge of debt on their principal residence. This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).* In addition, many homeowners who complete a Short Sale may have other ways to avoid the “forgiveness of debt income” tax, such as insolvency or a tax loss on the Short Sale property. As with all tax issues, it is recommended that you consult with a qualified tax professional to determine any tax issues regarding a Short Sale. * Nothing on this site is should be construed as giving tax advice. Please consult with your own qualified tax professional. This information is from the IRS’ web site at,,id=179414,00.html .

Will my mortgage company allow a short sale?

  • We have completed short sales with practically all major lenders, including, but not limited to: Bank of America, BAC Home Loan Servicing, Wells Fargo Home Mortgage, Wells Fargo Home Equity, Chase, JP Morgan Chase, Chase Home Finance LLC, Wachovia, Aurora, Indymac/OneWest, EMC, HSBC, GreenTree, GMAC, ASC, First Franklin, First Tennessee, Everhome, CitiMortgage, CitiFinancial, Homecomings, National City Mortgage, HomEq, Greenpoint Mortgage, 1st Horizon, Saxon Mortgage Services, Seterus (formerly LBPS), Nationstar Mortgage (formerly Centex Home Equity Company), Capital One, PHH Mortgage, and more!

We Have Short Sale Approval From
Most Major Lenders, Including:
-Bank of America (Countrywide)
-Bank of America Home Loans
-Wells Fargo Home Mortgage
-Wells Fargo Home Equity
-JP Morgan Chase
-First Franklin
-First Tennessee
-National City Mortgage
-Greenpoint Mortgage
-1st Horizon
-Banco Popular
-Provident Funding
-and more