Pam Marron Home Lending

Short Sale Hardship

July 28, 2013 by · Leave a Comment 

Explaining what is really happening is like reliving a bad divorce all over again.

Recently, I was told that lenders have a perception that underwater homeowners simply stop making their mortgage payments when they are set to leave a negative equity property. The assumption is that the lender will take months before they come knocking to serve foreclosure papers, so this can be months of no payments made, preparing for a home exit. There is an opinion that the vast number of underwater homeowners wanting to exit with a short sale are doing this.

Further, it was stated that these same underwater homeowners are misinformed about requirements of lenders that imply underwater homeowners need to go delinquent to get a short sale approval. When the frustration was voiced that only the 4 D’s, Divorce, Disability, Death and Distant Relocation, seem to be evaluated as hardships, the opinion was that it is hard to distinguish hardship.

I have heard lenders state to homeowners that they had to be delinquent in order to get a short sale approval consideration on 3-way calls.

I work daily with homeowners across the U.S. who are trying desperately to exit their home in a short sale while staying current on their mortgage.

And I have read their letters of hardship. The person was right. It is hard to distinguish hardship with what lenders are given.

So I went back to the past and some current short seller documents and took a look at their hardship letters again.

Nearly all of the letters are one page in length, quickly consolidating problems ranging from loss of job to death in short paragraphs. This must be the template requested by lenders. Or, expressing hardship was too difficult for most affected to put in writing.

Most of these letters glaze over hardships and voice words of great humility, pleading to allow an exit from their home without further economic damage than already endured.

Clear Definition of Hardships, Where Applied, and Where to Find Lists for Short Sale Approval

First, the hardships need to be noted. And, there are two lists of hardships.

Below is a list of each:

hardships list2

The only way to show what is really happening with short sellers is for them to tell their stories.

Initial Hardship Letter to get Short Sale Approval

The hardship letter given to lenders for an initial short sale process is part of the paperwork I request when helping past and currently applying short sellers. This usually, but not always, tells what the final straw was that broke the camel’s back.

Past short sellers don’t tell the whole story on these hardship letters. It’s not because they don’t know how, but because it is incredibly hard for them to do so. In every case, the short seller has taken the blame for what happened. They are humiliated that they can’t pay back the debt, and feel stupid that they didn’t see this whole housing downturn coming.

Past short sellers often label themselves as strategic defaulters. There has been so much hype about strategically defaulting, that most short sellers think that they are a strategic defaulter. And, an army worth of short sellers have been reluctant to come forward and state that it was the lender who told them to be delinquent in order to get short sale approval. Either way, they could not win. Delinquency required to proceed with a short sale was (and is still being!) implied to proceed. Staying current is looked at with suspicion and not “proving hardship” enough.

Amending Hardship Letters

So, I went back to the 43 cases I have worked with over the past 2 years. I reread the hardship letters, spoke with many of these short sellers again, and asked them for more information. I probed about lengths of time where it might be assumed that these folks were stalling on purpose so that they would not have to pay their mortgage.

This was harder than initially thought. Major medical problems were learned of, where relocations to any job was necessary to keep insurance. Divorce explanations often included moving back in with family members because credit was shot and a new lease could not be obtained. Reductions in income and an escalation in debt happened often.

Though a glimmer of the hardship was on their initial lender letter, it was briskly glossed over, probably because it would have taken too much room on the paper to explain.

So I asked these past short sellers if they would take the time to really explain what their hardship was, leading up to it, and then after the short sale. I asked them to explain how they weren’t taking advantage of the bank, and the number of times they had to resubmit paperwork that seemed to get lost over and over again. I ask them to explain that even when they suffered a reduction in income, that their priority to make the mortgage payment was 1st. I ask them to state if and who told them they needed to be delinquent in order to get short sale approval. I ask them to explain how they exhausted all of their financial assets before throwing in the towel. I ask them to explain how they worried how the negative credit would affect them if they needed to relocate elsewhere, and if they could make the move at all with damaged credit. I ask them to explain how the problems of exiting an underwater home stalled them from getting on with their lives. I ask them to explain how the stress sometimes destroyed their marriages and affected their families.

Maybe it is not worth the painful effort to see what really happened, and what continues to happen to those trying to exit an underwater home. It is the only way it can be proven that we are not paying nearly enough attention to existing problems still surrounding 12 million underwater homeowners, and 2.2 million past short sellers now trying to reenter the housing market.

It’s like reliving a bad divorce all over again.

It is because of what is in their expanded letters, that I want to help them even more.

Attention finally coming to Short Sellers and Underwater Homeowners…. and Immense Thanks to all who are helping!

March 9, 2013 by · 1 Comment 

You know when you finally get somewhere when you have been trying for a long time, and it finally happens? It is finally happening, and thanks to the staff at U.S. Congressman Gus Bilirakis’s office, I am going to Washington, D.C. to share targeted problems of short sellers and underwater homeowners with agencies and politicians that can help with solutions.

I am extremely grateful to so many who understand the plight of these folks who are not able to exit underwater homes without major damage to their credit and most often, without proper direction that is no shorter than 4-6 months.

 Since the inception of this challenge which was never meant to be a challenge, the stories from across the U.S. and right here in the Tampa Bay area have bothered me to my core, and the folks that are helping have been troubled as well.

I am grateful to so many who have helped, many on their own dime when I couldn’t afford their services in this fight.

Attorney Chae DuPont, with Morris and DuPont Law Firm, who taught me there is a way to qualify homeowners for a modification and short sale, who is brilliant at finding the best avenue for underwater homeowners that takes into account the WHOLE picture, including education and preparation for what happens after the fact. To attorney Julan Mustafa with Morris and DuPont, who has referred countless folks who he thought I could help when they weren’t in need of attorney services. To the” dynamic trio” staff at Morris and DuPont, who are pit bulls at getting to the final resolve for the clients, and who are an inspiration to me to keep going. And Jorge Fajardo, head of Loss Mitigation, a veteran mortgage professional, who can understand the mortgage technical aspects of incredibly complicated situations.

To Marilynn DeChant, owner of DeChant Public Relations, who introduced me to Shahra Anderson, Executive Director for Senator Bill Nelson, and who, along with much help from business partner Lia Gallegos, helped me quickly get together a White Paper that went via Ms. Anderson to the White House last year.  Ms. DeChant has continued to support this effort and arranged to meet with Greg Giordano at (now) Fl. State Representative Mike Fasano’s office and has been at meetings with U.S. Congressman Gus Bilirakis’s staff.    

To the staff of U.S. Congressman Gus Bilirakis, Elizabeth Hittos and Michael Ciminna, who have helped us with aspects of this problem since August of 2012, and have offered guidance to key people for this trip. To Michael Ciminna, thank you for your efforts to help our veterans and to Elizabeth Hittos, for your support of bi-partisan solutions on this underwater housing crisis affecting so many in Florida. And thank you to Senator Bill Nelson’s Executive Director, Shahra Anderson, for working with us on behalf of Senator Bill Nelson’s office, and for your bi-partisan efforts with the staff at US Congressman Gus Bilirakis‘s office.   

To Greg Giordano at Florida State Representative Mike Fasano’s office, who heard the plight of underwater homeowners and short sellers and who got Fl. Representative Mike Fasano on board with a plan to bring an expansive platform of help to these homeowners in the near future.

To realtors Roxanne Amato and Lorraine Seddon with Future Home Realty, who gathered important statistics on numbers of underwater homeowners affected in Florida starting in April of 2011. This was the beginning, as an eerie loss of buyers was the hunch of major problems coming.

To realtors Laura Bech/ At Home in Pasco and Diane Chisholm/Prudential Tropical Realty, who gave me my first clients who had past short sales and helped me learn what these folks were REALLY going through.

To realtor Christie Johnson, Remax New Dimensions, who I met thanks to Marilynn DeChant. Christie strongly sees the value of helping underwater homeowners who want to be current on their mortgage but proceed with a short sale. Christie Johnson referred me to Robin Furer, First National Title Services, who arranged a meeting with Laura Salemme, First National Title Services owner. Laura Salemme, very experienced in title but also a veteran mortgage professional, clearly saw the challenge of helping short sellers proceed while being current, and was willing to hire a person who would do nothing but meet this challenge. I am grateful to for looking forward to what this means…. to help these past short sellers get back on their feet and re-enter the housing market with credit intact. This is the title company I will recommend to all.

To Realtors Jim Chapman and Dan Stephenson with Prudential Tropical Realty, who saw the ”pinpoint” of credit problems I saw coming, saw WHY we had to correct it, saw the benefit it would provide to the real estate community and provided the first support.

To Gunther Flaig, builder/developer in Tampa Bay, Florida, who recognized that correcting this problem could affect the ability of new homeowners to come back into the real estate market. Many homeowners coming into model homes cite they’d love to buy a new home but can’t due to constraints of selling an underwater home. Gunther saw that paying attention to this and helping these homeowners  to keep their credit intact can help these folks prepare themselves for a new purchase after a short sale.

To the clients that worked so hard with me to get approved for another home when they met the REAL guidelines of a mortgage purchase after a short sale. You know who you are, and I am grateful that you allowed me to get involved to learn how to help. That’s the only way. I know these folks are humiliated by press that slanders them as a “strategic defaulter” when they were given no choice but to be delinquent by their lenders. Most of these clients will not go public with problems they are encountering, comparing it to a divorce: they thought they were done and then I make them relive the bad experience again. Thank you for facing this and getting through it.

To Ken Harney with the Washington Post, who “gets it” and has enlightened me to all sides with his thought provoking articles.

To Terry Clemens, Executive Director of the National Consumer Reporting Association, who encouraged me to keep up the fight last year before the election when I became angry that the problem was ignored because of the election.  Much was going on to help behind the scenes. Terry Clemens and Renee Erickson, another NCRA board member and with Acranet, Inc., invited me as a speaker to the NCRA Conference in Dec. 2012 where I met many credit agencies facing the same problems I was having. This conference is also where I met Tom Oscherwitz with the Consumer Financial Protection Bureau, and was able to present the serious credit error of a foreclosure on short sale credit that is stalling past short sellers from re-entering the housing market. Because of Mr. Clemens, along with Mr. Oscherwitz and with the help of Avantus Credit, we have been able to see problems in back end code on the Fannie Mae and Freddie Mac automated underwriting systems.  

To Frank Pallotta, Managing Partner with Loan Value Group, LLC, (developers of the Responsible Homeowner Reward program), who is now working with Arizona and many other Hardest Hit Funds states to help eligible underwater consumers with the benefits of the HARP 2.0 program when additional lender overlays prevent an approval. This is an important program that every state that has underwater homeowners needs to seriously consider. Frank Pallotta also provided me a path at the beginning and shared contacts that could help at high levels. Locating those who truly see the plight and can help was critical.

To Joe Gendelman, Fl. Regional Director for National Credit Federation, who patiently figured out a way to get creditors to correct the erroneous error of the foreclosure code when the loan closed as a short sale. He is also regional director for Business Credit Ally which helps business owners separate their personal credit from their business. Small business owners are fearful of what delinquent mortgage credit will do to the growth of their business.

To those of you with select lenders who are doing the right thing and not requiring underwater homeowners to be delinquent while they proceed with a short sale. You know who you are. I cannot name you, but wish I could.

To those of you at the U.S. Treasury: you have helped more than you know… to listen, intervene and direct to the proper resources when homeowners and I have been at the highest frustration. You have helped with FHFA, Fannie Mae and Freddie Mac connections.

To the present housing department at the White House: keep pushing The Plan to Help Homeowners Refinance rolled out by President Obama in March of 2012 that can help many of the 16 million underwater homeowners that do not have a Fannie Mae or Freddie Mac loan and cannot take advantage of HARP 2.0. It was your fact sheet that showed us how a shorter term mortgage could get underwater homeowners back into a positive equity position.     

Grateful to all, Pam Marron

WE the PEOPLE Petition at…

July 13, 2012 by · Leave a Comment 

 Thank you for submitting your signature on the White House petition ….    Had a great opportunity to speak to the regional director for Sen. Bill Nelson (D-FL) who offered to take the petition along with additional information to White House staffers on April 13 when President Obama was in Tampa. So, although we didn’t successfully get the 25,000 signatures on the petition, we did succeed in getting the petition where it needs to go after all!

This is not about politics. It IS about helping underwater homeowners and the real estate industry.

Here’s what the petition states:


require banks to stop forcing underwater homeowners to default in order to qualify for a short sale!

 Banks are forcing underwater homeowners to default in order to qualify for a short sale, causing these homeowners to be mislabeled as strategic defaulters. (Strategic defaulters are those that can make their mortgage payment but choose not to.)

This bank policy of requiring late mortgage payments before the short sale automatically disqualifies homeowners from getting an FHA mortgage for three years.

Lenders, the U.S. Treasury, FHFA, and Making  Homes Affordable all are aware of this problem. Yet, nothing has been done to correct this policy. This inaction is directly preventing thousands of short sellers from reentering the housing market.

Put a stop to the damaging practice of lenders forcing underwater homeowners to be late on their mortgage in order to qualify for a short sale.”

Senator Bill Nelson Calls for Correction of Short Sales Erroneously Coded as Foreclosures

May 25, 2012 by · Leave a Comment 


Credit reports label

On May 7th, 2013, Senator Bill Nelson (D-Fl) went to the  Subcommittee on Consumer Protection, Product Safety and Insurance to get to the bottom of a major problem keeping past short sellers from re-entering the housing market.

Based upon a current Realty Trac report, up to to 2.2 million past short sellers are eligible to re-enter the housing market, past the required wait timeframe to get a new mortgage after a short sale. However, these past short sellers apply for a mortgage only to be denied through both Fannie Mae and Freddie Mac automated underwriting systems (AUS) because short sale credit shows up as a foreclosure. Why is this so detrimental? A foreclosure requires a 7 year wait to get another mortgage, while a short sale only requires a 2 year wait afterwards, and with a 20% downpayment, to get a new mortgage. This delay threatens the rebound of the U.S. housing market, and will negatively affect the credit and ability of another 16 million underwater consumers who may need to short sale in the future, to go forward.


Below is the link and transcripted words of Senator Bill Nelson (D-FL), Senator Claire McCaskill (D-MO), Corey Stone, Assistant Director, Deposits, Cash, Collections, and Reporting Markets, Consumer Financial Protection Bureau (CFPB); Stuart K. Pratt, Consumer Data Industry Association (CDIA), Ira Rheingold, National Association of Consumer Advocates (NACA), and the National Consumer Law Center (NCLC)

WASHINGTON, D.C.—The U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance held a hearing on Tuesday, May 7, 2013 at 2:30 p.m. titled Credit Reports: What Accuracy and Errors Mean for Consumers.

Click on the link to load and view the webcast housed at C-Span: “Credit Reports: What Accuracy and Errors Mean for Consumers.”

This is a large video so please allow time to load.

1st, go to time of 58:46 where Senator Nelson addresses Corey Stone with the Consumer Financial Protection Bureau (CFPB):

Senator Nelson 3              Corey Stone.CFPB

Senator Bill Nelson (FL-D)                                               Corey Stone, CFPB


Transcript starting at 58:46:

Senator Bill Nelson: “Ok, I want to ask you about something else. Under the Fair Credit Reporting Act, all credit files should be reported accurately. Isn’t that correct?”

Corey Stone/CFPB: “That’s correct.”

Senator Bill Nelson: “OK. And if a person goes into foreclosure, someone, indeed, that will be noted and it will affect their credit, will it not?”

Corey Stone/CFPB: “Absolutely.”

Senator Bill Nelson: “Then I would ask both of you all, as the regulator s, why are people who don’t go into foreclosure but go into a short sale which the government, this government, under law that we have passed actually encourages, and even encourages with some tax incentives, why is a short sale being coded in the credit reporting agencies the same as a foreclosure? And it’s happening in my state right now! Why?”

Corey Stone/CFPB: “Short sales is a relatively new phenomenon and it is important that it be reported accurately because Fannie and Freddie and the GSE’s and the FHA treat those differently in their underwriting system. So if they can’t distinguish between a short sale and a foreclosure, somebody whose had a short sale will be treated as if they’ve had a foreclosure. The coding of this information is coming into the 3 credit bureaus from furnishers in identical files but it’s our understanding, and this is something we’ve talked to the Consumer Data Industry Association about, and you can ask Mr. Pratt, the next witness about…”

Senator Bill Nelson: “I don’t know what you’ve just said. Why is a short sale being coded the same and you all as the regulators are allowing it to be coded the same as a foreclosure which is a completely different breed of horse.”

Corey Stone/CFPB: “Yeah. Right now, there is a special treatment for short sales that does code them differently but not in the same way that other kinds of ends of loans are coded and a technical aspect that I think Mr. Pratt will be able to shed more light on. But right now, some of the credit reporting agencies do report this information accurately from the information that they receive but not all….”

Senator Bill Nelson: “But they haven’t been (doing so) in Florida. You’re the Consumer Financial Protection Bureau. You’re supposed to be protecting consumers. You’re supposed to be seeing that fair trade is going on. Here we have a new phenomenon. We have a lot of mortgages underwater, people still want to sell their homes. You get into a state like mine where 40% of all of the mortgages in the state are underwater and you want commerce to continue. You want to get the economy to recover. And, so why then penalize the poor person, and we’ve seen this over and over in Florida… why penalize them because they’ve done something we’ve encouraged, and then they have their credit completely blown?”  

Corey Stone/CFPB: “We agree with you, Senator, that foreclosures and short sales should be clearly distinguished in credit reports. We’ve become aware of this problem and we’re trying to track down exactly how to fix it, uh, and we’ll have to get back to you on it.”   

Senator Bill Nelson: “Well, here’s what I’d suggest that you do. Since you’re supposed to be protecting the consumer (and so are you too, stated to the FTC spokesperson), I have just called this to the attention of your respective chairman, Ms. Ramirez and Mr. Cordray, and I would appreciate it if you all would stop this nonsense and get it coded correctly so that our people are not being penalized. Thank you very much.”


Then, go to 2nd piece from 2:22:51 to 2:24:52 where Senator Claire McCaskill asks Stuart Pratt with CDIA the question of Senator Bill Nelson, “Why is a short sale being coded as a foreclosure?”


Senator Claire McCaskill Stuart Pratt.CDIA Rheingold

Senator Claire McCaskill (D-MO)               Stuart Pratt, (CDIA)                               Ira Rheingold, NACA, NCLC

Transcript: starting at 2:22:51: 

Senator Claire McCaskill: “I have a question from Senator Nelson for Mr. Pratt. Why is a short sale being coded as a foreclosure?”

Stuart Pratt/CDIA: “Well they’re not, but I think that Mr. Stone said it right. The short sale is a new. We’ve had deed-in-lieu, we’ve had foreclosures, we now have short sales. The Metro 2 Task Force, which the CDIA administers, is now looking at a new short sale code because in fact it isn’t a scoring issue in this case, it’s a Fannie and Freddie issue. Fannie and Freddie are administering some programs and they need to be able to identify short sales uniquely, different than any other loan, which is simply settled for less than the full amount. So, we have a code that is settled for less than full amount. And, generally we try to keep codes broad rather than narrow because very narrow codes generally don’t populate into the data base , they don’t become scoreable, they don’t become useable. So in this case, we probably will have to create a short sale code, because Fannie and Freddie are looking for something like a short sale code and they want to see it uniquely and differently from any other settled for less than full amount loan that’s out there in the marketplace, and that’s why…”

 Senator Claire McCaskill: “so you’re saying perspectively you will code it differently but now it’s being coded the same?”

Stuart Pratt/CDIA: “Lenders are coding it as a paid for less than full amount.”

Senator Claire McCaskill: “Which is the same as a foreclosure…”

Stuart Pratt/CDIA: “Uh, no. Actually a foreclosure is yet a different coding. If a lender is coding foreclosure on it’s own, they are miscoding a short sale, which would be a data furnisher issue, which would be an issue that the CFPB could look into just as they can look into our practices with our members.”

Rheingold: “But that coding has an incredibly negative impact on the consumers’ ability to get credit. I’d also add that short sales have been around for a long time. I’ve represented homeowners for 25 years and we were doing short sales 20 years ago. So, it’s not a new phenomena. Maybe the prevalence of it, it’s been around for a long time…”

 Stuart Pratt/CDIA: “I think that’s well said. The prevalence of it, and the relevance of it to certain new processes that Fannie and Freddie are trying to roll out in the marketplace.”  



Lack of Short Sale Code in Credit Reporting System Creating Hardship for Many Consumers

February 11, 2012 by · Leave a Comment 


Mon, 2013-03-11 15:13 — Terry W. Clemans

The system used by the American credit reporting industry to report the history of consumer payments to creditors to the national credit repositories has a serious flaw, according to some members of the mortgage industry. This flaw is the lack of a specific code for short sale mortgage transactions. With the current mortgage climate of millions of short sale consumers needing properly documented accounts of their previous mortgage problem so they can re-enter the housing market, this problem is reaching epidemic proportions in some of the hardest hit regions of the country. There is speculation that this flaw could be holding back the recovery of the housing market, as many short sellers are prohibited from re-entering the housing market for a longer period of time than required by lenders.

Metro2 is the coding format used by the national credit repositories and the creditors to set the operating procedures for the data in the credit reporting system. It was created by the Consumer Data Industry Association (CDIA), a trade association dominated by the three credit repositories: TransUnion, Experian and Equifax. Anyone working with credit reports much will quickly identify most of the Metro2 codes. In looking at a tradeline for a consumers payment history shown as an “R-1” for example; the “R” stands for Revolving Accounts like credit cards, “I” for Installment, etc., and the number portion representing the last payment status. As in the “R-1” example, the “1” represents the account being paid as agreed, a “2” represents paid 30 days late and higher numbers steadily indicate later payments on up to the dreaded “9” rating, which indicates the account is in collection. While this is just a portion of the many codes in the system designed to handle all of the various scenarios possible in every aspect of lending covered by the American credit reporting system, as of today there is no specific code for a mortgage transaction via short sale.

Short sales are difficult to deal with due to the complexity of the transaction, and are reported with a foreclosure status. Historically this worked, as a short sale transaction was traditionally in conjunction with foreclosure activities. In today’s mortgage marketplace, especially in light of the Federal Housing Finance Agency’s (FHFA—the government agency regulating Fannie Mae and Freddie Mac) short sale policy statement of Nov. 1, 2012, that allows homeowners to short sale without ever being late on their mortgage, the old system of reporting short sales needs updating. Some in the industry believe this is a problem and are working on it; others seem to believe that the status quo is the best route and reporting short sales with a tie to a foreclosure is accurate. Considering the mortgage crisis we are struggling to overcome, and the numbers of consumers who were put into extraordinary circumstances, I believe that the system needs to be carefully reviewed and altered as many consumers who short sell today are much better credit risks that the pre housing crisis foreclosure consumers. It seems that others in the industry have similar beliefs.

In a May 2011 report by Steven Chaouki, a group vice president at TransUnion, titled “Life After Foreclosure and Hidden Opportunities,” he presents a hypothesis that would indicate:

1. Defaulting on a mortgage causes temporary excess liquidity. This excess liquidity masks the true risk of the consumer as he goes through the foreclosure process, and

2. Certain consumers who defaulted on a mortgage in the recent recession only did so because of the recession—they are otherwise good credit risks.

Another person who is very critical of the current system is Pam Marron of Bankers Mortgage who has spent the past 24 years originating mortgages in the Tampa, Fla. market. This is one of the regions devastated by the housing crisis and she sees this issue as “one of the greatest problems facing the housing market in its struggle to rebound.” In working with Tampa area homeowners who have been plagued with this reporting problem over the past couple years she has documented two major problems for homeowners:

1. With no short sale specific code the reporting of a foreclosure status results in a denial of a mortgage in both Fannie Mae and Freddie Mac automated underwriting systems. This stalls past short sellers from re-entering the housing market, even after the required timeframes for reentry after the short sale have passed.

2. Many lenders are still telling underwater homeowners that they must be delinquent on the mortgage to get short sale approval, contrary to the new FHFA short sale policy. This enables the continuation of the current system of reporting short sales as a foreclosure.

Since over the past couple years Pam has had to deal with more short sales in the Tampa market than mortgage originators in most other parts of the country, she has identified two solutions to the problem. One a quick term band aide type approach to help consumers right now, then the long term fix that may require government assistance to ultimately provide the correction needed on a systemwide basis.

The quick fix is to get the short sale lender to provide a letter at closing to the underwater homeowner that simply states “this mortgage closed as a short sale, not as a foreclosure. Any credit markings reflective of a foreclosure should be deleted.” This letter can be used by the mortgage credit reporting agency to correct the repository data to more accurately reflect the short sale status.

The long term fix, and the one that brings much greater challenges, is the creation of a specific short sale code added the Metro2 system so that this manual step is no longer needed. This would allow the lenders to properly track the short sellers in the automated underwriting systems. It would also set up the proper tracking to determine if the short sellers created from the housing crisis are a different credit risk than traditional foreclosures so that this category of transactions can be properly evaluated for their true credit risks. That will require system changes, analysis and those take time when talking about systems as large as those that operate the United States credit reporting industry.

One closing thought that has been provided by many mortgage originators recently on how to help the mortgage market improve, for lenders that do not follow the FHFA Short Sale policy effective Nov. 1, 2012 be held accountable for their disregard of the policy. They report to many consumers still being told that they must be delinquent on their loan to short sale. With the CFPB and Congress looking at the credit reporting industry and the mortgage market closely, it’s possible that the forces to create these changes are in place and help may soon be on the way for the estimated 16 million still underwater American homeowners.

Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached at (630) 539-1525 or e-mail

Link to article at National Mortgage Professional Magazine:

Welcome to my site!

December 21, 2009 by · Leave a Comment 

Thank you for stopping by, also the home of!  Even though I have taken special care and consideration to pack this online resource with a wealth of knowledge about residential mortgage loans and SOLUTIONS for underwater homeowners, feel free to contact me at any time to discuss your unique needs and expectations.

I have been a residential mortgage broker since 1985 and still love this business!