I was proposing to a propsective client to short-sale his property in Reno, Nevada. Client responded that he tried to short-sale but nobody made an offer. He showed me his latest credit report and the mortgage was now "Charge off account, profit and loss writeoff". At the same time, a collection agency declared it "Placed for collection". The client inquired with a credit repair company and this company (according to my cleint) could clean up these two accounts.
I am just curious, is this possible? Maybe, these accounts could be cleaned up, however, could the lender may still have the right to garnish his income or put a lien to my client's other property?
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This is an "apples and oranges" issue.
The credit repair person may be successful in getting the collection item off the credit report by demanding proof under Fair Debt Collection Act. However, the right to sue for deficiency is an entirely different thing. There may be enough money involved to justify the expense of a suit from the view of the debt collector.
The owner should consider protect himself from liability by pursuing a short sale for whatever market value is on his property, and demand settlement in full and release from deficiency as a prior condition.
Post-closing, he can consider getting the adverse items on his credit report removed using credit repair techniques.
Thank you for your input. I agree on your thoughts and I just really want to see the comments of our fellow Super Stars.
Thanks and good luck!
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