Experian views Short-Sales as Foreclosures!

Submitted by Anonymous (not verified) on Sun, 02/03/2008 - 04:50

First let me begin with Experian’s stand on what is termed as Key Derogatory

According to experian - Key Derogatory = Claim, Term Default, Government Claim, Paid by Dealer, Bankruptcy Chapter 7, 11 or 12 Petitioned, or Discharged and Bankruptcy Chapter 7, 11, or 12 Reaffirmation of Debt Rescinded.

But our Short-Sale was approved and agreed upon by our Mortgage company!
Due to financial hardships beyond our control and the housing bust we avoided foreclosure by agreeing to a short-sale approved by the mortgage company.
We felt good about ourselves... Plus the loan was an FHA insured loan which meant that Countrywide WAS PAID in FULL! Thus everything was settled.

All other reporting agencies are just listing as Paid/Settled/0 balance.
Some months Later we found that Countrywide added additional comments to our Experian Credit File about the Loan!

Therefore EXPERIAN listed the FHA short sale as KEY DEROGATORY which is the same as FORECLOSURE or Delinquent in Experian’s terms(as mentioned above) Months after everything was settled, Countrywide mortgage left remarks on my credit report stating "Yes - Legally Paid but short of the full balance"

Because of that not totally correct Statement from CountryWide, Our Score dropped 20 points and Experian is the only agency placing a KD or equivalent of FORCLOSURE on my report!
That’s just WRONG! How can the consumer benefit from economic stimulus if one of the Credit Agencies makes us look like American Peasants! Basically telling us to "Let'em Eat Cake!"
I’m disputing but with little success. Experian feels a short sale is the same as a Foreclosure. And lists it as KEY DEROGATORY!! meaning un-settled!

We worked so hard to avoid foreclosure and this is what we get.
CW approved the short sale anyway because there was already 3 foreclosures on my street alone thus dropping the property value. I did CW a favor by sticking it out and not foreclosing. They got paid by the buyer and FHA!

What should I Do?

SeekingJustice (not verified)

It was actually a 35 point DROP... the score went down to 565 when it was at 600.

I'm not sure if i should send a timed(RESPOND TO NEGATIVE Comments in 30 Days) certified letter to CW asking them to remove statements they've added to my report that caused Experian to mark the loan as Default or Foreclosure or what i should write to Experian that they are illegally marking the shortsale as the equivalent as Foreclosure! With additional statement of "KEY-DEROGATORY" which i found out is how they also mark Foreclosures on credit reports

This addition to my credit report was pretty recent because the shortsale was approved and settled upon back in August of 2007!

Where do i begin? What leverage do i have?

Sun, 02/03/2008 - 14:08 Permalink

Did you go 30+ days late?
Have you already begun the dispute process?
Can you copy and paste the entire entry?
Is the score a FICO, or the "Vantage Score?"

Sun, 02/03/2008 - 14:55 Permalink

Did you have an agreement with CW stating that the account would be reported as paid in full or deleted?

Sun, 02/03/2008 - 15:12 Permalink

I would definately dispute it if they agreed to it.

Sun, 02/03/2008 - 15:44 Permalink

I just seen where the state set a man out of his house because they said they offered him a fair price and he refused it.

Mon, 02/04/2008 - 17:22 Permalink
Going through … (not verified)

Here is the major problem with Experian's KD rating (I am going through this myself). The whole reason I short saled - and actually came out of pocket 3K to do so - was so that I could buy in as little as two years. Since I now have a KD on my record which is considered a foreclosure, I am not allowed to buy property for five years (according to FannieFreddie lending guidelines). I know many of you out there will say I got what I deserved (you're probably right) but that is a separate issue. Point is I went through the months of hassle, inconvenience, and out of pocket cash to short sale instead of foreclosure when there was no benefit to do so.

Fri, 10/10/2008 - 20:54 Permalink

I'm going through a short sale myself to avoid foreclosure and it's very informative to know how this may show on my credit report. After 9 months of trying to work w/Chase to lower our payments after a $600 increase in March, we really had no choice-they just weren't willing to lower the payments. Since there are and will be more and more of us out there having to do the same thing, i.e. short sales, etc, there should be some new ground rules set by the credit reporting agencies. I think you should dispute with Experian. Good luck and keep us posted. I know that a lot more of us will be looking to see how we will need to handle situations like this in regards to our credit reports.

Fri, 10/10/2008 - 22:58 Permalink

My home was recently foreclosed on and sold 2 days ago. We signed off on the property because my x husband is 68 yrs old and can't afford it. I am disabled and live in NC he lives in PA. He tried for a reverse mortgage but was denied. I am quickly finding out that if you don't have direct connections with all three credit reporting agencies, then they just simply beat around the bush and your questions never get answered. Is any one else having this problem??Also since I signed off of the property when he filed for a reverse mortgage(and got denied) am I still legally responsible for the foreclosure???

Sun, 02/10/2013 - 20:49 Permalink
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Tue, 08/05/2014 - 11:32 Permalink