I had a nice conversation with a young man who moved from FL to SC, is current on both his first w/ ING Direct and his HELOC w/ Regions Bank. Breaking even/losing a little w/ his tenants. No plans to return to FL. Already purchased a home in SC but only real concern is the hit to his credit score. I want to send him some info on this but not sure on what to send. Any Superstars w/ suggestions on how to capture this listing by overcoming the credit objection?? Thanks in advance!

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He could get a 50-200 point score drop on just the short sale - "settled".  If he is not motivated to do the short sale, I would drop him.  I think sellers need to REALLY want to do a short sale.

But hold on. Won't underwater homeowners who qualify for the upcoming short-sale program be fundamentally different? Won't they have solid mortgage payment histories despite being underwater? Why should they have to take the same heavy hits to their scores earned by people who didn't pay their mortgage for months on end?

Good questions, but it appears that these sellers won't get the break they deserve. The scoring system, credit experts say, isn't set up to recognize — or properly report — short sales by on-time mortgage customers to the national credit bureaus. And the credit score companies aren't planning to make any changes to the penalties their models assign to people who participate in short sales.

Anthony Sprauve, a spokesman for Fair Isaac Corp., developer of the FICO score, says that in general, when a loan is paid off for less than the full balance, it is "classified as a severe negative item" by the FICO scoring model. And "there are currently no plans to change," he added.

http://articles.latimes.com/2012/sep/09/business/la-fi-harney-20120909

Kevin - That is a VERY interesting article.

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