Credit reports frequently have mistakes. Very often consumers are not aware of these mistakes until they are trying to obtain credit for a large purchase like a home or car. There is a process for rectifying credit mistakes, but it can take some time.
As more and more short sales are being processed it is only natural that some mistakes are showing up on credit reports, especially since there is no standard way for a credit report to reflect a short sale. The bank may report loan paid as agreed, or loan paid for less than the full amount. Which ever way it is reported it should not say foreclosure. Unfortunately occasionally this will happen, but the fix is easy. When you sell a home as a short sale you will receive a HUD1 statement. this is a statement that spells out what money came in from the sale and how it was distributed. If a home is foreclosed there is no HUD1 given to the owner. So, if you have a HUD1 your home was not foreclosed. You should send the HUD1 to the credit reporting agency along with the statement that since you have a HUD1 you were not foreclosed on. They can then remove the foreclosure from your credit report.
It is probably a good idea to check your credit report 6 and 12 months after a short sale just to make sure this has not happened.
If you have any questions about short sales please feel free to contact me.
Marcy Moyer CDPE
Keller Williams Realty
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