That’s what they call them. Those agents that call on homeowners behind on mortgage payments, who have had a Notice of Default filed, calling to convince the occupant that they should do a Short Sale instead of having their home foreclosed. In truth, real estate agents cannot give legal advice, and if you are offered any, you should be immediately suspect. If you are in mortgage trouble and get a call from an agent, realize that the caller has a huge conflict of interest. They are paid nothing if they don’t sell a house. They have nothing to lose by calling. Whatever ethical challenge posed, the overriding concern of the agent too often becomes the possible sale.
I wish it weren’t so. I wish all my colleagues were driven by service to clients and ethical behavior above all, but in fact that just isn’t the way it works in real life. Money changes everything. Remember that PLEASE if you get that call from an agent.
One of the things I keep hearing sellers being told is that a Short Sale can “save” your credit. I cannot give legal advice either, but I do have a guide from the California Association of REALTORS about the relative credit effects of either Foreclosure or the alternatives. I am not allowed to post it here (I asked politely too). But I am allowed to reprint it and give it away to clients. There are 3 relevant Legal Q&As, as excerpted below:
SHORT SALES AND FORECLOSURES
Q. My client is a distressed homeowner facing foreclosure. Will a short sale be better for his credit score as compared to foreclosure?
A. No. According to www.myfico.com, both a short sale and foreclosure are considered very negative events for someone’s credit rating because they are not “paid as agreed” accounts. Furthermore, www.myfico.com states that, as far as a FICO score is concerned, “there is no difference between foreclosures and short sales.” A distressed homeowner may have other reasons to prefer a short sale or foreclosure, but the two options have the same impact on someone’s FICO® score.
C.A.R. Legal Articles:
• Credit After Foreclosure, Bankruptcy, or Short Sale
• Short Sales
• Taxation of Foreclosures and Short Sales
If you’d like any or all of these 3 articles in print, I can get that for you. But I won’t be calling on you, or offering any legal advice. Be wary of those that do.