Q. How can you ease the affect of a short sale in order to avoid a huge hit to one’s credit? Do short sales have an increasing negative effect as the property value gets lower and lower?

A.  Unfortunately short sales, foreclosures and signing a Deed in Lieu of Foreclosure will all negatively impact your credit.  You should do everything in your power to stay in your home and continue to make payments on the loan.   Don’t give up.  Foreclosures are happening everywhere but you should check with you lender to see if they have a better solution for you.  Recently Fannie Mae and Freddie Mac have changed their rules for when they will again such a borrower for a new home.  They have increased the waiting time from four to five years and although that may not be good news for you it just shows that lenders are being defensive after horrendous losses and you are going to have to prove you learned before you will able to get a loan again.