Short Sale After Chapter Seven Filing in Oregon and Washington

//Short Sale After Chapter Seven Filing in Oregon and Washington

Short Sale After Chapter Seven Filing in Oregon and Washington

At first glance, it would appear that there is no point in doing a short sale in Portland, Vancouver or anywhere else for that matter after filing a Chapter 7 Bankruptcy. After all, the bankruptcy discharge eliminates the debt owed on the house. There are, however,  some reasons why Oregon and Washington debtors might want to at least tentatively pursue a short sale after their cases are filed.

First, under Freddie Mac and Fannie Mae guidelines there are a different waiting periods for corresponding derogatory credit events. Under current guidelines, the waiting period to purchase after a chapter 7 discharge is two years. After a short sale, the waiting period is likewise two years. The waiting period for a foreclosure, however, is a full seven years.

These guidelines are not set in stone and a demonstration of extenuating circumstances regarding any any of these derogatory credit events can enable a debtor to get a new mortgage much sooner. The fact is that doing a short sale rather than going through foreclosure allows the debtor to avoid having uncomfortable conversations with prospective lenders after two years rather than seven.

2018-05-15T06:18:30+00:00

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Written by Tom McAvity, Esq., bankruptcy lawyer
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