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VA Foreclosure Homes

Question: If I short sale on a VA home loan and the VA covers the rest of the payoff will it effect my credit?

I can not sell my house for my asking price the market is just to slow now if I short sale my house I will probably have a better chance of unloading it

The house is currently under a VA Home Loan which guarantees the lender if I fault they will recover 36,000 k in loses on top of whatever they sell it at a sheriffs sell

Now I know a short sell dings your credit like a foreclosure however my question is if I short sell and the VA covers the rest of the pay off amount (which they will and do I called and asked) will I still take a short sell credit hit because the lender is getting the full paid off amount?

Trust me I have asked the lender and the VA and my real estate agent and I have yet to get a defiant answer

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Answer: First of all, you can not do a short sale unless the mortgage holder agrees to it. The VA home loan only covers you if you were to '"default" and go into foreclosure. Then the VA would cover some of the loss. If you wish to sell your property, but the net proceeds from the sale won’t pay off your loan and you can’t afford to pay the shortage, the VA may allow you to sell your home without paying the entire amount due. You’ll need to complete a Financial Analysis Form and send the VA a letter requesting a short sale.
They (the VA) would also start taking deductions of any VA comp you are receiving if you are getting disability benefits if they have to actually pay anything to the mortgage company.

Your best bet is to get another veteran to buy the house, is your VA mortgage assumable (some Realtors forget to have that included in the deed.)

The effect of a short sale on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a foreclosure in redemption status, which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.

Hope this answer is of help to you
LEGAL DISCLAIMER: The answer provided here is intended for informational purposes only. It is not intended nor presumed to be legal counsel or professional legal advice

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